Question 1

How can tariffs be justified?

Accepted Answer

Tariffs are justified on the grounds tha

Question 2

Although an import tariff provides the domestic government additional tax revenue,it benefits domestic consumers at the expense of domestic producers.

Accepted Answer

A) True 
 B)False

Question 3

For industrial nations,tariffs on raw materials generally are

Accepted Answer

A)  higher than on manufactured products 
B)  lower than on manufactured products 
C)  equal to tariffs on manufactured products 
A)  higher than on manufactured products 
B)  lower than on manufactured products 
C)  equal to tariffs on manufactured products

Question 4

Suppose that Mexico levies a tariff on steel that is collected as a fixed amount of money per ton imported.This refers to

Accepted Answer

A)  a compound tariff 
B)  an ad valorem tariff 
C)  a specific tariff 
D)  an effective tariff 
A)  a compound tariff 
B)  an ad valorem tariff 
C)  a specific tariff 
D)  an effective tariff

Question 5

Which of the following is a fixed percentage of the value of an imported product as it enters the country?

Accepted Answer

A)  Specific tariff 
B)  Ad valorem tariff 
C)  Nominal tariff 
D)  Effective tariff 
A)  Specific tariff 
B)  Ad valorem tariff 
C)  Nominal tariff 
D)  Effective tariff

Question 6

Exhibit 4.2 
In the absence of international trade,assume that the equilibrium price and quantity of motorcycles in Canada is $14,000 and 10 units respectively.Assuming that Canada is a small country that is unable to affect the world price of motorcycles,suppose its market is opened to international trade.As a result,the price of motorcycles falls to $12,000 and the total quantity demanded rises to 14 units; out of this total,6 units are produced in Canada while 8 units are imported.Now assume that the Canadian government levies an import tariff of $1,000 on motorcycles.
-Refer to Exhibit 4.2.As a result of the tariff,the price of imported motorcycles equals $13,000 and imports total 4 cycles.

Accepted Answer

A) True 
 B)False

Question 7

An import tariff reduces the welfare of a "small" country by an amount equal to the redistribution effect plus the revenue effect.

Accepted Answer

A) True 
 B)False

Question 8

Figure 4.4 Market for Gasoline in a Small Nation
  
-Figure 4.4 represents the market for gasoline in a small nation.The free trade world price of gasoline is $3.50.Suppose this small nation imposes a tariff on gasoline of $.50 per gallon.The change in producer surplus would be

Accepted Answer

A)  area a + b 
B)  area a 
C)  area a + b + f 
D)  area a + b + f + g + h 
A)  area a + b 
B)  area a 
C)  area a + b + f 
D)  area a + b + f + g + h

Question 9

During the Great Recession of 2007-2009,countries increased import tariffs to protect their producers damaged by foreign competition.

Accepted Answer

A) True 
 B)False

Question 10

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico,a "small" nation that is unable to affect the world price.
Figure 4.1.Import Tariff Levied by a "Small" Country
  
-Consider Figure 4.1.With free trade,the total value of Mexico's imports equal:

Accepted Answer

A)  $220 
B)  $260 
C)  $290 
D)  $300 
A)  $220 
B)  $260 
C)  $290 
D)  $300

Question 11

Which of the following policies permits a specified quantity of goods to be imported at one tariff rate and applies a higher tariff rate to imports above this quantity?

Accepted Answer

A)  Tariff quota 
B)  Import tariff 
C)  Specific tariff 
D)  Ad valorem tariff 
A)  Tariff quota 
B)  Import tariff 
C)  Specific tariff 
D)  Ad valorem tariff

Question 12

Suppose that the tariff on imported steel is 40 percent,the tariff on imported iron ore is 20 percent,and 30 percent of the cost of producing a ton of steel consists of the iron ore it contains.The effective rate of protection of steel is approximately 49 percent.

Accepted Answer

A) True 
 B)False

Question 13

Assume the United States adopts a tariff quota on steel in which the quota is set at 2 million tons,the within-quota tariff rate equals 5 percent,and the over-quota tariff rate equals 10 percent.Suppose the U.S.imports 1 million tons of steel.The resulting revenue effect of the tariff quota would accrue to:

Accepted Answer

A)  The U.S.government only 
B)  U.S.importing companies only 
C)  Foreign exporting companies only 
D)  The U.S.government and either U.S.importers or foreign exporters 
A)  The U.S.government only 
B)  U.S.importing companies only 
C)  Foreign exporting companies only 
D)  The U.S.government and either U.S.importers or foreign exporters

Question 14

Tariff evasion occurs when individuals or firms escape tariffs by illegal means such as smuggling imported goods into a country.

Accepted Answer

A) True 
 B)False

Question 15

What happens to effective protection when the value added by the domestic producer declines?

Accepted Answer

The degree

Question 16

The most vocal political pressure for tariffs is generally made by:

Accepted Answer

A)  Consumers lobbying for export tariffs 
B)  Consumers lobbying for import tariffs 
C)  Producers lobbying for export tariffs 
D)  Producers lobbying for import tariffs 
A)  Consumers lobbying for export tariffs 
B)  Consumers lobbying for import tariffs 
C)  Producers lobbying for export tariffs 
D)  Producers lobbying for import tariffs

Question 17

If I purchase a stereo from South Korea,I obtain the stereo and South Korea obtains the dollars.But if I purchase a stereo produced in the United States,I obtain the stereo and the dollars remain in America.This line of reasoning is:

Accepted Answer

A)  Valid for stereos,but not for most products imported by the United States 
B)  Valid for most products imported by the United States,but not for stereos 
C)  Deceptive since Koreans eventually spend the dollars on U.S.goods 
D)  Deceptive since the dollars spent on a stereo built in the United States eventually wind up overseas 
A)  Valid for stereos,but not for most products imported by the United States 
B)  Valid for most products imported by the United States,but not for stereos 
C)  Deceptive since Koreans eventually spend the dollars on U.S.goods 
D)  Deceptive since the dollars spent on a stereo built in the United States eventually wind up overseas

Question 18

A $100 specific tariff provides home producers more protection from foreign competition when:

Accepted Answer

A)  The home market buys cheaper products rather than expensive products 
B)  It is applied to a commodity with many grade variations 
C)  The home demand for a good is elastic with respect to price changes 
D)  It is levied on manufactured goods rather than primary products 
A)  The home market buys cheaper products rather than expensive products 
B)  It is applied to a commodity with many grade variations 
C)  The home demand for a good is elastic with respect to price changes 
D)  It is levied on manufactured goods rather than primary products

Question 19

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico,a "small" nation that is unable to affect the world price.
Figure 4.1.Import Tariff Levied by a "Small" Country
  
-According to Figure 4.1,the loss in Mexican consumer surplus due to the tariff equals:

Accepted Answer

A)  $225 
B)  $265 
C)  $285 
D)  $325 
A)  $225 
B)  $265 
C)  $285 
D)  $325

Question 20

Tariffs are not defended on the ground that they:

Accepted Answer

A)  Improve the terms of trade of foreign nations 
B)  Protect jobs and reduce unemployment 
C)  Promote growth and development of young industries 
D)  Prevent overdependence of a country on only a few industries 
A)  Improve the terms of trade of foreign nations 
B)  Protect jobs and reduce unemployment 
C)  Promote growth and development of young industries 
D)  Prevent overdependence of a country on only a few industries

How can tariffs be justified?

Although an import tariff provides the domestic government additional tax revenue,it benefits domestic consumers at the expense of domestic producers.

For industrial nations,tariffs on raw materials generally are

Suppose that Mexico levies a tariff on steel that is collected as a fixed amount of money per ton imported.This refers to

Which of the following is a fixed percentage of the value of an imported product as it enters the country?

An import tariff reduces the welfare of a "small" country by an amount equal to the redistribution effect plus the revenue effect.

Figure 4.4 Market for Gasoline in a Small Nation -Figure 4.4 represents the market for gasoline in a small nation.The free trade world price of gasoline is $3.50.Suppose this small nation imposes a tariff on gasoline of $.50 per gallon.The change in producer surplus would be

During the Great Recession of 2007-2009,countries increased import tariffs to protect their producers damaged by foreign competition.

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico,a "small" nation that is unable to affect the world price. Figure 4.1.Import Tariff Levied by a "Small" Country -Consider Figure 4.1.With free trade,the total value of Mexico's imports equal:

Which of the following policies permits a specified quantity of goods to be imported at one tariff rate and applies a higher tariff rate to imports above this quantity?

Suppose that the tariff on imported steel is 40 percent,the tariff on imported iron ore is 20 percent,and 30 percent of the cost of producing a ton of steel consists of the iron ore it contains.The effective rate of protection of steel is approximately 49 percent.

Tariff evasion occurs when individuals or firms escape tariffs by illegal means such as smuggling imported goods into a country.

What happens to effective protection when the value added by the domestic producer declines?

The most vocal political pressure for tariffs is generally made by:

If I purchase a stereo from South Korea,I obtain the stereo and South Korea obtains the dollars.But if I purchase a stereo produced in the United States,I obtain the stereo and the dollars remain in America.This line of reasoning is:

A $100 specific tariff provides home producers more protection from foreign competition when:

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico,a "small" nation that is unable to affect the world price. Figure 4.1.Import Tariff Levied by a "Small" Country -According to Figure 4.1,the loss in Mexican consumer surplus due to the tariff equals:

Tariffs are not defended on the ground that they:

The International Economy and Globalization

Foundations of Modern Trade Theory: Comparative Advantage

Sources of Comparative Advantage

Nontariff Trade Barriers

Trade Regulations and Industrial Policies

Trade Policies for the Developing Nations

Regional Trading Arrangements

International Factor Movements and Multinational Enterprises

The Balance-of-payments

Foreign Exchange

Exchange Rate Determination

Mechanisms of International Adjustment

Exchange Rate Adjustments and the Balance-of-payments

Exchange Rate Systems and Currency Crises

Macroeconomic Policy in an Open-economy

International Banking: Reserves, Debt, and Risk

Filters

Exam 4: Tariffs

How can tariffs be justified?

Although an import tariff provides the domestic government additional tax revenue,it benefits domestic consumers at the expense of domestic producers.

For industrial nations,tariffs on raw materials generally are

Suppose that Mexico levies a tariff on steel that is collected as a fixed amount of money per ton imported.This refers to

Which of the following is a fixed percentage of the value of an imported product as it enters the country?

An import tariff reduces the welfare of a "small" country by an amount equal to the redistribution effect plus the revenue effect.

Figure 4.4 Market for Gasoline in a Small Nation -Figure 4.4 represents the market for gasoline in a small nation.The free trade world price of gasoline is $3.50.Suppose this small nation imposes a tariff on gasoline of $.50 per gallon.The change in producer surplus would be

During the Great Recession of 2007-2009,countries increased import tariffs to protect their producers damaged by foreign competition.

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico,a "small" nation that is unable to affect the world price. Figure 4.1.Import Tariff Levied by a "Small" Country -Consider Figure 4.1.With free trade,the total value of Mexico's imports equal:

Which of the following policies permits a specified quantity of goods to be imported at one tariff rate and applies a higher tariff rate to imports above this quantity?

Suppose that the tariff on imported steel is 40 percent,the tariff on imported iron ore is 20 percent,and 30 percent of the cost of producing a ton of steel consists of the iron ore it contains.The effective rate of protection of steel is approximately 49 percent.

Tariff evasion occurs when individuals or firms escape tariffs by illegal means such as smuggling imported goods into a country.

What happens to effective protection when the value added by the domestic producer declines?

The most vocal political pressure for tariffs is generally made by:

If I purchase a stereo from South Korea,I obtain the stereo and South Korea obtains the dollars.But if I purchase a stereo produced in the United States,I obtain the stereo and the dollars remain in America.This line of reasoning is:

A $100 specific tariff provides home producers more protection from foreign competition when:

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico,a "small" nation that is unable to affect the world price. Figure 4.1.Import Tariff Levied by a "Small" Country -According to Figure 4.1,the loss in Mexican consumer surplus due to the tariff equals:

Tariffs are not defended on the ground that they:

The International Economy and Globalization

Foundations of Modern Trade Theory: Comparative Advantage

Sources of Comparative Advantage

Nontariff Trade Barriers

Trade Regulations and Industrial Policies

Trade Policies for the Developing Nations

Regional Trading Arrangements

International Factor Movements and Multinational Enterprises

The Balance-of-payments

Foreign Exchange

Exchange Rate Determination

Mechanisms of International Adjustment

Exchange Rate Adjustments and the Balance-of-payments

Exchange Rate Systems and Currency Crises

Macroeconomic Policy in an Open-economy

International Banking: Reserves, Debt, and Risk

Filters