Question 1

The reason tariffs and quotas are imposed is that

Accepted Answer

A)  their costs are concentrated and their benefits are spread among many people. 
B)  they create net benefits in the long run. 
C)  they reduce import dependence. 
D)  their costs are spread among many people and their benefits are concentrated. 
A)  their costs are concentrated and their benefits are spread among many people. 
B)  they create net benefits in the long run. 
C)  they reduce import dependence. 
D)  their costs are spread among many people and their benefits are concentrated.

Question 2

The effect of an import quota is to

Accepted Answer

A)  increase the supply of the good and lower its price. 
B)  decrease the supply of the good and raise its price. 
C)  increase the demand for the good and increase its price. 
D)  increase the supply of the good and increase its price. 
A)  increase the supply of the good and lower its price. 
B)  decrease the supply of the good and raise its price. 
C)  increase the demand for the good and increase its price. 
D)  increase the supply of the good and increase its price.

Question 3

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?

Accepted Answer

A)  €445,000,000 
B)  €440,000,000 
C)  €375,000,000 
D)  €528,000,000 
A)  €445,000,000 
B)  €440,000,000 
C)  €375,000,000 
D)  €528,000,000

Question 4

Reducing a tariff will _________the domestic production of the good and _________the total domestic consumption of the good.

Accepted Answer

A)  decrease; increase 
B)  increase; decrease 
C)  decrease; decrease 
D)  increase; increase 
A)  decrease; increase 
B)  increase; decrease 
C)  decrease; decrease 
D)  increase; increase

Question 5

Because wage rates are so low in Africa, why donʹt Microsoft, Cisco and other major corporations close down their American operations and move to Africa?

Accepted Answer

Wage rates must be weighed against produ

Question 6

Explain the effects of a quota.

Accepted Answer

A quota is a quantitative restriction on

Question 7

A tariff _________the quantity of the good imported and _________the domestic price of the imported good.

Accepted Answer

A)  increases; lowers 
B)  decreases; decreases 
C)  decreases; increases 
D)  does not change; increases 
A)  increases; lowers 
B)  decreases; decreases 
C)  decreases; increases 
D)  does not change; increases

Question 8

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

Accepted Answer

A)  U.S. demand curve shifts leftward. 
B)  U.S. supply curve shifts rightward. 
C)  price in the United States rises but neither the U.S. demand curve nor the U.S. supply curve shift.. 
D)  U.S. demand curve shifts rightward. 
A)  U.S. demand curve shifts leftward. 
B)  U.S. supply curve shifts rightward. 
C)  price in the United States rises but neither the U.S. demand curve nor the U.S. supply curve shift.. 
D)  U.S. demand curve shifts rightward.

Question 9

A tariff imposed by the United States on Japanese cars _________the price of cars in the United States and _________the quantity of Japanese cars imported into the United States.

Accepted Answer

A)  lowers; decreases 
B)  raises; decreases 
C)  raises; increases 
D)  lowers; increases 
A)  lowers; decreases 
B)  raises; decreases 
C)  raises; increases 
D)  lowers; increases

Question 10

What is dumping?

Accepted Answer

Dumping is the situation in wh

Question 11

A tariff

Accepted Answer

A)  is a tax imposed on exported goods. 
B)  has no effect on prices paid by domestic consumers even though it increases the revenue collected by domestic producers. 
C)  is a tax imposed on imported goods. 
D)  encourages worldwide specialization according to the principle of comparative advantage. 
A)  is a tax imposed on exported goods. 
B)  has no effect on prices paid by domestic consumers even though it increases the revenue collected by domestic producers. 
C)  is a tax imposed on imported goods. 
D)  encourages worldwide specialization according to the principle of comparative advantage.

Question 12

_________occurs when a foreign firm sells its exports at a lower price than it costs to produce the goods.

Accepted Answer

A)  Learning-by-doing 
B)  Dumping 
C)  A tariff 
D)  Comparative advantage 
A)  Learning-by-doing 
B)  Dumping 
C)  A tariff 
D)  Comparative advantage

Question 13

Belize, a country in Central America, has a small coffee industry. Suppose Belize does not have free trade but it has comparative advantage in coffee production. If Belize allowed international trade, what would be the gains from trade?

Accepted Answer

A)  Belize coffee consumers would gain from trade 
B)  All of these answers are gains from trade 
C)  Belize would gain tariff revenue from trade 
D)  Belize coffee producers would gain from trade 
A)  Belize coffee consumers would gain from trade 
B)  All of these answers are gains from trade 
C)  Belize would gain tariff revenue from trade 
D)  Belize coffee producers would gain from trade

Question 14

An import quota protects domestic producers by

Accepted Answer

A)  increasing the total supply of the product. 
B)  setting a limit on the amount of imports. 
C)  placing a prohibitive tax on imports. 
D)  encouraging competition among domestic producers. 
A)  increasing the total supply of the product. 
B)  setting a limit on the amount of imports. 
C)  placing a prohibitive tax on imports. 
D)  encouraging competition among domestic producers.

Question 15

Why do nations engage in international trade?

Accepted Answer

Nations engage in international trade be

Question 16

Of the groups listed below, which is most likely to lobby for protection?

Accepted Answer

A)  workers in the import industry 
B)  producers in the export industry 
C)  consumers in the import industry 
D)  workers in the export industry 
A)  workers in the import industry 
B)  producers in the export industry 
C)  consumers in the import industry 
D)  workers in the export industry

Question 17

Less developed countries, compared to industrialized ones, are more likely to have higher tariff rates.

Accepted Answer

A) True 
 B)False

Question 18

The Smoot-Hawley Act was enacted in

Accepted Answer

A)  1980. 
B)  1930. 
C)  1950. 
D)  2000. 
A)  1980. 
B)  1930. 
C)  1950. 
D)  2000.

Question 19

Import quotas_________ the price of imported goods and_________ the quantity consumed in the nation imposing the quota.

Accepted Answer

A)  lower; decrease 
B)  lower; increase 
C)  raise; increase 
D)  raise; decrease 
A)  lower; decrease 
B)  lower; increase 
C)  raise; increase 
D)  raise; decrease

Question 20

Economists usually agree with which of the following arguments that favor protectionism?

Accepted Answer

A)  the job protection defense 
B)  the competition with cheap foreign labor defense 
C)  the dumping defense 
D)  None of the above. Economists generally agree that arguments in favor of protection are flawed. 
A)  the job protection defense 
B)  the competition with cheap foreign labor defense 
C)  the dumping defense 
D)  None of the above. Economists generally agree that arguments in favor of protection are flawed.

The reason tariffs and quotas are imposed is that

The effect of an import quota is to

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?

Reducing a tariff will _the domestic production of the good and _the total domestic consumption of the good.

Because wage rates are so low in Africa, why donʹt Microsoft, Cisco and other major corporations close down their American operations and move to Africa?

Explain the effects of a quota.

A tariff _the quantity of the good imported and _the domestic price of the imported good.

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

A tariff imposed by the United States on Japanese cars _the price of cars in the United States and _the quantity of Japanese cars imported into the United States.

What is dumping?

A tariff

_________occurs when a foreign firm sells its exports at a lower price than it costs to produce the goods.

Belize, a country in Central America, has a small coffee industry. Suppose Belize does not have free trade but it has comparative advantage in coffee production. If Belize allowed international trade, what would be the gains from trade?

An import quota protects domestic producers by

Why do nations engage in international trade?

Of the groups listed below, which is most likely to lobby for protection?

Less developed countries, compared to industrialized ones, are more likely to have higher tariff rates.

The Smoot-Hawley Act was enacted in

Import quotas_ the price of imported goods and_ the quantity consumed in the nation imposing the quota.

Economists usually agree with which of the following arguments that favor protectionism?

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

Review

Filters

Exam 15: International Trade Policy

The reason tariffs and quotas are imposed is that

The effect of an import quota is to

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?

Reducing a tariff will _________the domestic production of the good and _________the total domestic consumption of the good.

Because wage rates are so low in Africa, why donʹt Microsoft, Cisco and other major corporations close down their American operations and move to Africa?

Explain the effects of a quota.

A tariff _________the quantity of the good imported and _________the domestic price of the imported good.

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

A tariff imposed by the United States on Japanese cars _________the price of cars in the United States and _________the quantity of Japanese cars imported into the United States.

What is dumping?

A tariff

_________occurs when a foreign firm sells its exports at a lower price than it costs to produce the goods.

Belize, a country in Central America, has a small coffee industry. Suppose Belize does not have free trade but it has comparative advantage in coffee production. If Belize allowed international trade, what would be the gains from trade?

An import quota protects domestic producers by

Why do nations engage in international trade?

Of the groups listed below, which is most likely to lobby for protection?

Less developed countries, compared to industrialized ones, are more likely to have higher tariff rates.

The Smoot-Hawley Act was enacted in

Import quotas_________ the price of imported goods and_________ the quantity consumed in the nation imposing the quota.

Economists usually agree with which of the following arguments that favor protectionism?

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

Review

Filters

Reducing a tariff will _the domestic production of the good and _the total domestic consumption of the good.

A tariff _the quantity of the good imported and _the domestic price of the imported good.

A tariff imposed by the United States on Japanese cars _the price of cars in the United States and _the quantity of Japanese cars imported into the United States.

Import quotas_ the price of imported goods and_ the quantity consumed in the nation imposing the quota.