Question 1

In the case of a small country,producer surplus

Accepted Answer

A) increases more with a tariff than with an equivalent quota. 
B) increases more with a quota than with an equivalent tariff. 
C) is not changed by tariffs or quotas. 
D) increases the same with tariffs and equivalent quotas. 
E) increases more with quotas.

Question 2

A real cost of tariffs and quotas that is difficult to measure is that they

Accepted Answer

A) encourage rent seeking. 
B) shift income from consumers to producers. 
C) limit the quantity of imports. 
D) reduce wages. 
E) cause deflation.

Question 3

Draw a graph showing the effects of imposing a tariff in the small country case.Describe the results,using the concepts of producer surplus,consumer surplus and deadweight loss.Specifically address the effects on consumers,producers,government revenue and overall national well being,connecting those effects to areas of your graph.

Accepted Answer

The answer of Draw a graph showing the effects of...

Question 4

Give an example from your text of a nontariff measure that could reduce the quantity of imports or exports.

Accepted Answer

The answer of Give an example from your text of...

Question 5

Intellectual property rights protection is a critical issue for the pharmaceutical industry among others.

Accepted Answer

A) True 
 B)False

Question 6

Which type of restriction on quantity of imports is the most transparent?

Accepted Answer

A) Quota 
B) Licensing requirements 
C) Voluntary export restraints 
D) Government procurement policies

Question 7

An increase in domestic demand for a product protected by a quota results in an increase in producer surplus for domestic firms,while for a tariff it would result in more imports.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is FALSE?

Accepted Answer

A) Consumer surplus increases after a tariff is placed on imports. 
B) Producer surplus increases after a tariff is imposed. 
C) Government revenue increases after a tariff is imposed. 
D) Deadweight losses result from tariffs.

Question 9

Which of the following is NOT an expected benefit of reducing nontariff barriers to trade?

Accepted Answer

A) Fewer firms to compete with 
B) Lower prices for many goods 
C) Increase in the volume of exports and imports 
D) Increase in production levels 
E) Improved overall economic welfare

Question 10

In which way are tariffs different from quotas?

Accepted Answer

A) They reduce the volume of imported products. 
B) They raise the price of the imported products to consumers. 
C) They increase the domestic quantity supplied of the product. 
D) They raise government revenue.

Question 11

Suppose a manufacturer of software develops a new computer program that sells for $50.The $50 cost includes $0.25 for the CD it is stored on,$5 for the labor of the company software programmers,and $1.75 for packaging materials and transportation costs.Value added by the software company is

Accepted Answer

A) $49.75. 
B) $48.25. 
C) $48. 
D) $44.75. 
E) $43.

Question 12

In order for large countries to successfully use tariffs to increase well being,

Accepted Answer

A) they must have significant market power so that foreign firms will cut prices to preserve their sales. 
B) the deadweight loss created by the tariff must be greater than the government revenue the tariff generates. 
C) domestic production must increase more significantly than for the small country case. 
D) domestic consumption and imports must decrease more significantly than in the small country case.

Question 13

What has been the most significant obstacle to progress in the Doha Round?

Accepted Answer

The answer of What has been the most significant obstacle...

Question 14

Describe intellectual property rights.What agreements have been reached regarding their protection? What are the benefits and the costs of protecting intellectual property rights?

Accepted Answer

The answer of Describe intellectual property rights.What agreements have been...

Question 15

What is Joseph Stiglitz' main criticism regarding intellectual property rights protection?

Accepted Answer

The answer of What is Joseph Stiglitz' main criticism regarding...

Question 16

Deadweight losses are the only potential cost associated with tariffs,which is why they are preferred to quotas.

Accepted Answer

A) True 
 B)False

Question 17

Scenario 6.1
Suppose that United States furniture makers import $100 of wood and parts in order to make a dining room table selling for $500.The imports have no tariff of quota restrictions.
-Based on Scenario 6.1 above,if a tariff of 20 percent is placed on imports of dining room tables,the effective rate of protection is

Accepted Answer

A) 20 percent. 
B) 25 percent. 
C) 30 percent. 
D) 40 percent. 
E) There is not enough information to tell.

Question 18

Quotas usually lead to larger deadweight losses than tariffs.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is NOT correct about the effects of a tariff on an imported product?

Accepted Answer

A) Tariffs benefit domestic producers by raising price and domestic output. 
B) Tariffs increase government revenue. 
C) Tariffs mean higher prices and less consumption for consumers of the product. 
D) Tariffs increase the efficiency of how resources are allocated.

Question 20

When did intellectual property rights become part of trade agreements?

Accepted Answer

The answer of When did intellectual property rights become part...

Exam 6: The Theory of Tariffs and Quotas

In the case of a small country,producer surplus

A real cost of tariffs and quotas that is difficult to measure is that they

Give an example from your text of a nontariff measure that could reduce the quantity of imports or exports.

Intellectual property rights protection is a critical issue for the pharmaceutical industry among others.

Which type of restriction on quantity of imports is the most transparent?

An increase in domestic demand for a product protected by a quota results in an increase in producer surplus for domestic firms,while for a tariff it would result in more imports.

Which of the following is FALSE?

Which of the following is NOT an expected benefit of reducing nontariff barriers to trade?

In which way are tariffs different from quotas?

Suppose a manufacturer of software develops a new computer program that sells for $50.The $50 cost includes $0.25 for the CD it is stored on,$5 for the labor of the company software programmers,and $1.75 for packaging materials and transportation costs.Value added by the software company is

In order for large countries to successfully use tariffs to increase well being,

What has been the most significant obstacle to progress in the Doha Round?

Describe intellectual property rights.What agreements have been reached regarding their protection? What are the benefits and the costs of protecting intellectual property rights?

What is Joseph Stiglitz' main criticism regarding intellectual property rights protection?

Deadweight losses are the only potential cost associated with tariffs,which is why they are preferred to quotas.

Quotas usually lead to larger deadweight losses than tariffs.

Which of the following is NOT correct about the effects of a tariff on an imported product?

When did intellectual property rights become part of trade agreements?