Question 1

Table 4.1.Production Costs and Prices of Imported and Domestic VCRs
  
-Consider Table 4.1.The effective tariff rate equals:

Accepted Answer

A)  11.1 percent 
B)  16.7 percent 
C)  50.0 percent 
D)  100.0 percent 
A)  11.1 percent 
B)  16.7 percent 
C)  50.0 percent 
D)  100.0 percent

Question 2

Assume the United States is a large consumer of steel that is able to influence the world price.Its demand and supply schedules are respectively denoted by DU.S.and SU.S.in Figure 4.2.The overall (United States plus world) supply schedule of steel is denoted by SU.S.+W.
Figure 4.2.Import Tariff Levied by a "Large" Country
  
-Consider Figure 4.2.Of the $100 tariff,$____ is passed on to the U.S.consumer via a higher price,while $____ is borne by the foreign exporter; the U.S.terms of trade:

Accepted Answer

A)  $25,$75,improve 
B)  $25,$75,worsen 
C)  $75,$25,improve 
D)  $75,$25,worsen 
A)  $25,$75,improve 
B)  $25,$75,worsen 
C)  $75,$25,improve 
D)  $75,$25,worsen

Question 3

Table 4.1.Production Costs and Prices of Imported and Domestic VCRs
  
-Consider Table 4.1.Prior to the tariff,the total price of imported VCRs is:

Accepted Answer

A)  $150 
B)  $200 
C)  $225 
D)  $235 
A)  $150 
B)  $200 
C)  $225 
D)  $235

Question 4

Bonded warehouses and foreign trade zones have the effect of allowing domestic importers to postpone and prorate over time their import duty obligations.

Accepted Answer

A) True 
 B)False

Question 5

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 consumer surplus would be

Accepted Answer

A)  $15 
B)  $12.50 
C)  $27.50 
D)  $57.50 
A)  $15 
B)  $12.50 
C)  $27.50 
D)  $57.50

Question 6

Producer surplus is the revenue producers receive over and above the minimum necessary for production.

Accepted Answer

A) True 
 B)False

Question 7

For a "large" country,a tariff on an imported product may be partially absorbed by the domestic consumer via a higher purchase price and partially absorbed by the foreign producer via a lower export price.

Accepted Answer

A) True 
 B)False

Question 8

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 deadweight cost of the tariff totals:

Accepted Answer

A)  $60 
B)  $70 
C)  $80 
D)  $90 
A)  $60 
B)  $70 
C)  $80 
D)  $90

Question 9

Suppose an importer of steel is required to pay a tariff of $20 per ton plus 5 percent of the value of steel.This is an example of a (an):

Accepted Answer

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

Question 10

If we consider the impact on both consumers and producers,then protection of the steel industry is:

Accepted Answer

A)  In the interest of the United States as a whole,but not in the interest of the state of Pennsylvania 
B)  In the interest of the United States as a whole and in the interest of the state of Pennsylvania 
C)  Not in the interest of the United States as a whole,but it might be in the interest of the state of Pennsylvania 
D)  Not in the interest of the United States as a whole,nor in the interest of the state of Pennsylvania 
A)  In the interest of the United States as a whole,but not in the interest of the state of Pennsylvania 
B)  In the interest of the United States as a whole and in the interest of the state of Pennsylvania 
C)  Not in the interest of the United States as a whole,but it might be in the interest of the state of Pennsylvania 
D)  Not in the interest of the United States as a whole,nor in the interest of the state of Pennsylvania

Question 11

The placing of a tariff on imports will necessarily improve the national welfare of a large country,but it will worsen the national welfare of a small country.

Accepted Answer

A) True 
 B)False

Question 12

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,Mexican manufacturers gain ____ because of the tariff.

Accepted Answer

A)  $75 
B)  $85 
C)  $95 
D)  $105 
A)  $75 
B)  $85 
C)  $95 
D)  $105

Question 13

The redistribution effect of an import tariff is the transfer of income from the domestic:

Accepted Answer

A)  Producers to domestic buyers of the good 
B)  Buyers to domestic producers of the good 
C)  Buyers to the domestic government 
D)  Government to the domestic buyers 
A)  Producers to domestic buyers of the good 
B)  Buyers to domestic producers of the good 
C)  Buyers to the domestic government 
D)  Government to the domestic buyers

Question 14

A tax of 15 percent per imported item would be an example of:

Accepted Answer

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

Question 15

Suppose that Canada levies a tariff on imports that is a fixed percentage of the product's price.This refers

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 16

A nation whose imports constitute a very small portion of the world market supply is a price taker,facing a constant world price for its import commodity.

Accepted Answer

A) True 
 B)False

Question 17

Can import duties have unintended side effects?

Accepted Answer

Yes.Duties may discourage a company from

Question 18

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.The tariff leads to a deadweight welfare loss for Canada totaling $1,000.

Accepted Answer

A) True 
 B)False

Question 19

Free traders point out that:

Accepted Answer

A)  There is usually an efficiency gain from having tariffs 
B)  There is usually an efficiency loss from having tariffs 
C)  Producers lose from tariffs at the expense of consumers 
D)  Producers lose from tariffs at the expense of the government 
A)  There is usually an efficiency gain from having tariffs 
B)  There is usually an efficiency loss from having tariffs 
C)  Producers lose from tariffs at the expense of consumers 
D)  Producers lose from tariffs at the expense of the government

Question 20

Is it possible for a low nominal tariff rate to understate the effective rate of protection? What is tariff escalation?

Accepted Answer

Yes.In some countries,the effective rate

Table 4.1.Production Costs and Prices of Imported and Domestic VCRs -Consider Table 4.1.The effective tariff rate equals:

Table 4.1.Production Costs and Prices of Imported and Domestic VCRs -Consider Table 4.1.Prior to the tariff,the total price of imported VCRs is:

Bonded warehouses and foreign trade zones have the effect of allowing domestic importers to postpone and prorate over time their import duty obligations.

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 consumer surplus would be

Producer surplus is the revenue producers receive over and above the minimum necessary for production.

For a "large" country,a tariff on an imported product may be partially absorbed by the domestic consumer via a higher purchase price and partially absorbed by the foreign producer via a lower export price.

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 deadweight cost of the tariff totals:

Suppose an importer of steel is required to pay a tariff of $20 per ton plus 5 percent of the value of steel.This is an example of a (an):

If we consider the impact on both consumers and producers,then protection of the steel industry is:

The placing of a tariff on imports will necessarily improve the national welfare of a large country,but it will worsen the national welfare of a small country.

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,Mexican manufacturers gain ____ because of the tariff.

The redistribution effect of an import tariff is the transfer of income from the domestic:

A tax of 15 percent per imported item would be an example of:

Suppose that Canada levies a tariff on imports that is a fixed percentage of the product's price.This refers

A nation whose imports constitute a very small portion of the world market supply is a price taker,facing a constant world price for its import commodity.

Can import duties have unintended side effects?

Free traders point out that:

Is it possible for a low nominal tariff rate to understate the effective rate of protection? What is tariff escalation?

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

Table 4.1.Production Costs and Prices of Imported and Domestic VCRs -Consider Table 4.1.The effective tariff rate equals:

Table 4.1.Production Costs and Prices of Imported and Domestic VCRs -Consider Table 4.1.Prior to the tariff,the total price of imported VCRs is:

Bonded warehouses and foreign trade zones have the effect of allowing domestic importers to postpone and prorate over time their import duty obligations.

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 consumer surplus would be

Producer surplus is the revenue producers receive over and above the minimum necessary for production.

For a "large" country,a tariff on an imported product may be partially absorbed by the domestic consumer via a higher purchase price and partially absorbed by the foreign producer via a lower export price.

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 deadweight cost of the tariff totals:

Suppose an importer of steel is required to pay a tariff of $20 per ton plus 5 percent of the value of steel.This is an example of a (an):

If we consider the impact on both consumers and producers,then protection of the steel industry is:

The placing of a tariff on imports will necessarily improve the national welfare of a large country,but it will worsen the national welfare of a small country.

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,Mexican manufacturers gain ____ because of the tariff.

The redistribution effect of an import tariff is the transfer of income from the domestic:

A tax of 15 percent per imported item would be an example of:

Suppose that Canada levies a tariff on imports that is a fixed percentage of the product's price.This refers

A nation whose imports constitute a very small portion of the world market supply is a price taker,facing a constant world price for its import commodity.

Can import duties have unintended side effects?

Free traders point out that:

Is it possible for a low nominal tariff rate to understate the effective rate of protection? What is tariff escalation?

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