Exam 15: International Trade Policy

Which of the following reasons explains why rich countries persistently restrict textile imports from poor countries?

Prior to international trade, if country A has a lower price of product X than does country B, then we know definitely that

An import quota is a

In 2006, European Union tariff on imported bananas from Latin America was €176 a ton. Suppose 2)5 million tons of bananas were imported in 2006 but then the tariff decreased to €152 a ton in 2007 and as a result, 3 million tons were imported in 2007. What is the tariff revenue in 2007?

"Tariffs today in the United States are much higher than in the past." Is the previous statement correct or incorrect?

specifies the maximum amount of a good that may be imported in a given period of time.

The United States imposes a tariff on foreign limes. How does the tariff affect the U.S. price of a lime and the production of limes in the United States?

Why do nations engage in international trade?

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supp The world price is $20 per shirt. The United States imposes a tariff on imported shirts, $4 per shirt. -In the figure above, the U.S. government's revenue from the tariff is .

Discuss reasons why we see trade restrictions. Are any of these reasons valid?

An import quota specifies the

If a tariff is imposed, the price paid by domestic consumers will and the amount imported will .

A country specializes in the production of goods for which it has a comparative advantage. We find that

During the first 6 months of 2008, the United States imported 1,655,740,870 pounds of coffee. Suppose the United States is considering placing trade restrictions on the importation of coffee. If the United States has a goal of raising tax revenue from coffee imports, what policy should they pursue?

Suppose that elimination of tariffs on agricultural products means that 1,000 farm workers lose jobs that pay an of $20,000 per year. At the same time, because of the importation of relatively cheaper foreign vegetables, 150 mi consumers save $2 per year on their grocery bills. a) What is the total income lost by farm workers because of the free trade? b) What is the total dollar amount saved by all consumers combined? c) Which is greater, the lost income or the consumer savings? Do the benefits of free trade out- weigh the costs i simple example? d) Which group is most likely to become politically involved over the issue of removing the tariffs, the farm wo or the consumers? Why?

Trade is restricted because

The United States imports cars from Japan. If the United States imposes a tariff on cars imported from Japan, American

If the United States imposes a tariff on imported cars, the

The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supp The world price is $20 per shirt. The United States imposes a tariff on imported shirts, $4 per shirt. -In the figure above, with the tariff Americans buy million shirts per year.

-The above figure shows the domestic supply of and domestic demand for an imported good. The world price is unit. a) At the world price of $15 per unit, what is the domestic consumption and domestic production? b) At the world price of $15 per unit, what is the quantity imported? c) If the government imposes a tariff of $5 per unit, what is the domestic consumption and domestic productio d) With the $5 per unit tariff, what is the quantity imported? e) How much revenue does the government collect with a tariff of $5 per unit?