Question 1

-Refer to above figure.Given a tariff of $3 per unit,what is the country's consumer surplus?

Accepted Answer

The answer of 
-Refer to above figure.Given a tariff of...

Question 2

As globalization tends to increase the proportion of imported inputs relative to domestically supplied components

Accepted Answer

A)  the nominal tariff automatically increases. 
B)  the rate of (effective) protection automatically decreases. 
C)  the nominal tariff automatically decreases. 
D)  the rate of (effective) protection automatically increases. 
E)  the amount of tariffs levied increases.

Question 3

The fact that industrialized countries levy very low or no tariff on raw materials and semi processed goods

Accepted Answer

A)  helps developing countries export manufactured products. 
B)  has no effect on developing country exports. 
C)  hurts developing country efforts to export manufactured goods. 
D)  hurts developing country efforts to export raw materials. 
E)  does not affect industrialized countries' exports.

Question 4

A tax of 20 percent per unit of imported garlic is an example of a(n)

Accepted Answer

A)  specific tariff. 
B)  ad valorem tariff. 
C)  nominal tariff. 
D)  effective protection tariff. 
E)  a disadvantageous tariff

Question 5

-Refer to above figure.In the absence of a tariff and in the presence of trade,what is the country's consumer surplus?

Accepted Answer

The answer of 
-Refer to above figure.In the absence of...

Question 6

Throughout the post-World War II era,the importance of tariffs as a trade barrier has

Accepted Answer

A)  increased. 
B)  decreased. 
C)  remained the same. 
D)  fluctuated wildly. 
E)  demonstrated a classic random walk with a mean-reversion tendency.

Question 7

The European Union's Common Agricultural Policy (CAP)is,in effect

Accepted Answer

A)  a tariff imposed on agricultural exports. 
B)  a tariff imposed on agricultural imports. 
C)  a subsidy that reduces the cost of agricultural exports. 
D)  a subsidy that increases the cost of agricultural exports. 
E)  a quota that limits production of agricultural goods by EU nations.

Question 8

In the country levying the tariff,the tariff will

Accepted Answer

A)  increase both consumer and producer surplus. 
B)  decrease both the consumer and producer surplus. 
C)  decrease consumer surplus and increase producer surplus. 
D)  increase consumer surplus and decrease producer surplus. 
E)  decrease consumer surplus but leave producers surplus unchanged.

Question 9

The U.S.sugar quota

Accepted Answer

A)  generates government revenue. 
B)  results in net welfare benefits to the U.S. economy. 
C)  results in benefits to sugar producers that exceed the cost to consumers. 
D)  results in costs to consumers that exceed the benefits to sugar producers. 
E)  does not result in an efficiency loss.

Question 10

Suppose an import-competing firm is imperfectly competitive.Replacement of an export tariff with an import quota that yields the same level of imports will ________ market price,________ producer surplus,________ consumer surplus,________ government revenue,and ________ overall domestic national welfare.

Accepted Answer

A)  increase; increase; decrease; decrease; decrease 
B)  have no effect on; have no effect on; have no effect on; decrease; decrease 
C)  increase; have no effect on; decrease; decrease; increase 
D)  increase; increase; increase; decrease; have an ambiguous effect on 
E)  decrease; decrease; increase; decrease; increase

Question 11

-Refer to above figure.With free trade and no tariffs,what is the quantity of Widgets produced domestically?

Accepted Answer

The answer of 
-Refer to above figure.With free trade and...

Question 12

Specific tariffs are

Accepted Answer

A)  import taxes stated in specific legal statutes. 
B)  import taxes calculated as a fixed charge for each unit of imported goods. 
C)  import taxes calculated as a fraction of the value of the imported goods. 
D)  the same as import quotas. 
E)  import taxes calculated based solely on the origin country.

Question 13

An import quota will ________ producer surplus,________ consumer surplus,________ government revenue,and ________ overall domestic national welfare.

Accepted Answer

A)  increase; decrease; increase; have an ambiguous effect on 
B)  increase; decrease; decrease; decrease 
C)  increase; decrease; have no effect on; have an ambiguous effect on 
D)  increase; decrease; have no effect on; decrease 
E)  increase; increase; decrease; have an ambiguous effect on

Question 14

The principle benefit of tariff protection goes to

Accepted Answer

A)  domestic consumers of the good produced. 
B)  foreign consumers of the good produced. 
C)  domestic producers of the good produced. 
D)  foreign producers of the good produced. 
E)  the domestic government.

Question 15

When a government allows raw materials and other intermediate products to enter a country duty free,this generally results in a(an)

Accepted Answer

A)  effective tariff rate less than the nominal tariff rate. 
B)  nominal tariff rate less than the effective tariff rate. 
C)  rise in both nominal and effective tariff rates. 
D)  fall in both nominal and effective tariff rates. 
E)  rise in only the effective tariff rate.

Question 16

It is argued that a tariff may help promote employment in a single industry,but is not likely to help employment in general.Discuss.

Accepted Answer

The answer of It is argued that a tariff may...

Question 17

An export subsidy will ________ producer surplus,________ consumer surplus,________ government revenue,and ________ overall domestic national welfare.

Accepted Answer

A)  increase; decrease; increase; have an ambiguous effect on 
B)  increase; decrease; decrease; decrease 
C)  increase; decrease; have no effect on; have an ambiguous effect on 
D)  increase; decrease; have no effect on; decrease 
E)  increase; increase; decrease; have an ambiguous effect on

Question 18

Ad valorem tariffs are

Accepted Answer

A)  import taxes stated in ads in industry publications. 
B)  import taxes calculated as a fixed charge for each unit of imported goods. 
C)  import taxes calculated as a fraction of the value of the imported goods. 
D)  the same as import quotas. 
E)  import taxes calculated solely on the origin country.

Question 19

Should the home country be "large" relative to its trade partners,its imposition of a tariff on imports would lead to an increase in domestic welfare if the terms of the trade rectangle exceed the sum of the

Accepted Answer

A)  revenue effect plus redistribution effect. 
B)  protective effect plus revenue effect. 
C)  consumption effect plus redistribution effect. 
D)  production distortion effect plus consumption distortion effect. 
E)  terms of trade gain.

Question 20

An export tariff will ________ producer surplus,________ consumer surplus,________ government revenue,and ________ overall domestic national welfare.

Accepted Answer

A)  increase; decrease; increase; have an ambiguous effect on 
B)  increase; decrease; decrease; decrease 
C)  increase; decrease; have no effect on; have an ambiguous effect on 
D)  increase; decrease; have no effect on; decrease 
E)  increase; increase; decrease; have an ambiguous effect on

Exam 9: The Instruments of Trade Policy

-Refer to above figure.Given a tariff of $3 per unit,what is the country's consumer surplus?

As globalization tends to increase the proportion of imported inputs relative to domestically supplied components

The fact that industrialized countries levy very low or no tariff on raw materials and semi processed goods

A tax of 20 percent per unit of imported garlic is an example of a(n)

-Refer to above figure.In the absence of a tariff and in the presence of trade,what is the country's consumer surplus?

Throughout the post-World War II era,the importance of tariffs as a trade barrier has

The European Union's Common Agricultural Policy (CAP) is,in effect

In the country levying the tariff,the tariff will

The U.S.sugar quota

Suppose an import-competing firm is imperfectly competitive.Replacement of an export tariff with an import quota that yields the same level of imports will market price, producer surplus, consumer surplus, government revenue,and overall domestic national welfare.

-Refer to above figure.With free trade and no tariffs,what is the quantity of Widgets produced domestically?

Specific tariffs are

An import quota will producer surplus, consumer surplus, government revenue,and overall domestic national welfare.

The principle benefit of tariff protection goes to

When a government allows raw materials and other intermediate products to enter a country duty free,this generally results in a(an)

It is argued that a tariff may help promote employment in a single industry,but is not likely to help employment in general.Discuss.

An export subsidy will producer surplus, consumer surplus, government revenue,and overall domestic national welfare.

Ad valorem tariffs are

Should the home country be "large" relative to its trade partners,its imposition of a tariff on imports would lead to an increase in domestic welfare if the terms of the trade rectangle exceed the sum of the

An export tariff will producer surplus, consumer surplus, government revenue,and overall domestic national welfare.