Question 1

Tariffs are NOT defended on the grounds 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 over-dependence of a country on only a few industries. 
E)  protect domestic producers from foreign low prices. 
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 over-dependence of a country on only a few industries. 
E)  protect domestic producers from foreign low prices. A

Question 2

A tax of 20 percent per unit of imported garlic is an example of a(n)

Accepted Answer

A)  specific tariff. 
B)  ad valorem tariff. 
C)  nominal tariff. 
D)  effective protection tariff. 
E)  a disadvantageous tariff 
A)  specific tariff. 
B)  ad valorem tariff. 
C)  nominal tariff. 
D)  effective protection tariff. 
E)  a disadvantageous tariff B

Question 3

-Refer to above figure. In the absence of trade, how many Widgets does this country consume?

Accepted Answer

60

Question 4

If a small country imposes a tariff, then

Accepted Answer

A)  the producers must suffer a loss. 
B)  the consumers must suffer a loss. 
C)  the government revenue must suffer a loss. 
D)  the demand curve must shift to the left. 
E)  the world price on that item will shift. 
A)  the producers must suffer a loss. 
B)  the consumers must suffer a loss. 
C)  the government revenue must suffer a loss. 
D)  the demand curve must shift to the left. 
E)  the world price on that item will shift.

Question 5

The principle benefit of tariff protection goes to

Accepted Answer

A)  domestic consumers of the good produced. 
B)  foreign consumers of the good produced. 
C)  domestic producers of the good produced. 
D)  foreign producers of the good produced. 
E)  the domestic government. 
A)  domestic consumers of the good produced. 
B)  foreign consumers of the good produced. 
C)  domestic producers of the good produced. 
D)  foreign producers of the good produced. 
E)  the domestic government.

Question 6

An export tariff will ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

Accepted Answer

A)  increase; decrease; increase; have an ambiguous effect on 
B)  increase; decrease; decrease; decrease 
C)  increase; decrease; have no effect on; have an ambiguous effect on 
D)  increase; decrease; have no effect on; decrease 
E)  increase; increase; decrease; have an ambiguous effect on 
A)  increase; decrease; increase; have an ambiguous effect on 
B)  increase; decrease; decrease; decrease 
C)  increase; decrease; have no effect on; have an ambiguous effect on 
D)  increase; decrease; have no effect on; decrease 
E)  increase; increase; decrease; have an ambiguous effect on

Question 7

-Refer to above figure. Given a tariff of $3 per unit, what is the country's consumer surplus?

Accepted Answer

The answer of  
-Refer to above figure. Given a...

Question 8

-Refer to above figure. In the absence of trade, what is the country's consumer surplus?

Accepted Answer

The answer of  
-Refer to above figure. In the...

Question 9

Suppose the United States eliminates its tariff on ball bearings used in producing exports. Ball bearing prices in the United States would be expected to

Accepted Answer

A)  increase, and the foreign demand for U.S. exports would increase. 
B)  decrease, and the foreign demand for U.S. exports would increase. 
C)  increase, and the foreign demand for U.S. exports would decrease. 
D)  decrease, and the foreign demand for U.S. exports would decrease. 
E)  decrease, and the foreign demand would be unchanged. 
A)  increase, and the foreign demand for U.S. exports would increase. 
B)  decrease, and the foreign demand for U.S. exports would increase. 
C)  increase, and the foreign demand for U.S. exports would decrease. 
D)  decrease, and the foreign demand for U.S. exports would decrease. 
E)  decrease, and the foreign demand would be unchanged.

Question 10

The imposition of tariffs will help a nation attain which of the following goals?

Accepted Answer

A)  decreased domestic consumer prices 
B)  increased domestic employment 
C)  increased amount and variety of goods available for consumers 
D)  increased competition between domestic and foreign producers 
E)  gains for domestic producers 
A)  decreased domestic consumer prices 
B)  increased domestic employment 
C)  increased amount and variety of goods available for consumers 
D)  increased competition between domestic and foreign producers 
E)  gains for domestic producers

Question 11

A specific tariff provides home producers more protection 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. 
E)  the home supply outnumbers the foreign imports. 
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. 
E)  the home supply outnumbers the foreign imports.

Question 12

If an import-competing firm is the only domestic producer of a good, then a transition from autarky to free trade will ________ domestic price, ________ producer surplus, ________ consumer surplus, and ________ overall domestic national welfare.

Accepted Answer

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

Question 13

-Refer to above figure. The loss of Consumer Surplus due to the tariff equals ________.

Accepted Answer

The answer of  
-Refer to above figure. The loss...

Question 14

The imposition of tariffs on imports results in deadweight (triangle) losses. These are

Accepted Answer

A)  production and consumption distortion effects. 
B)  redistribution effects. 
C)  revenue effects 
D)  efficiency effects. 
E)  distortion of incentives. 
A)  production and consumption distortion effects. 
B)  redistribution effects. 
C)  revenue effects 
D)  efficiency effects. 
E)  distortion of incentives.

Question 15

-Refer to above figure. What is the amount of efficiency loss resulting from imposition of the tariff?

Accepted Answer

The answer of  
-Refer to above figure. What is...

Question 16

Economic theory in general, and trade theory in particular are replete with equivalencies. For example, it is argued that for any specific tariff one can find an equivalent ad valorem tariff; and that for any quota one can calculate a tariff equivalent. Discuss conditions or situations under which a specific and an ad valorem tariff are not equivalent. Discuss conditions or situations when a tariff and a quota are not equivalent.

Accepted Answer

E.g., during a period of price inflation

Question 17

-Refer to above figure. With free trade and no tariffs, what is the quantity of Widgets imported?

Accepted Answer

The answer of  
-Refer to above figure. With free...

Question 18

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)  consumers lobbying for lower import tariffs. 
D)  producers lobbying for export tariffs. 
E)  producers lobbying for import tariffs. 
A)  consumers lobbying for export tariffs. 
B)  consumers lobbying for import tariffs. 
C)  consumers lobbying for lower import tariffs. 
D)  producers lobbying for export tariffs. 
E)  producers lobbying for import tariffs.

Question 19

Which of the following are examples of goods that have been subject to voluntary export restraints?

Accepted Answer

A)  Japanese cars and Chinese solar panels 
B)  Belgian chocolates and French wines 
C)  French wines and cheeses 
D)  Japanese sushi and German cars 
E)  Taiwanese electronics and Canadian barley 
A)  Japanese cars and Chinese solar panels 
B)  Belgian chocolates and French wines 
C)  French wines and cheeses 
D)  Japanese sushi and German cars 
E)  Taiwanese electronics and Canadian barley

Question 20

Specific tariffs are

Accepted Answer

A)  import taxes stated in specific legal statutes. 
B)  import taxes calculated as a fixed charge for each unit of imported goods. 
C)  import taxes calculated as a fraction of the value of the imported goods. 
D)  the same as import quotas. 
E)  import taxes calculated based solely on the origin country. 
A)  import taxes stated in specific legal statutes. 
B)  import taxes calculated as a fixed charge for each unit of imported goods. 
C)  import taxes calculated as a fraction of the value of the imported goods. 
D)  the same as import quotas. 
E)  import taxes calculated based solely on the origin country.

Exam 9: The Instruments of Trade Policy

Tariffs are NOT defended on the grounds that they

A tax of 20 percent per unit of imported garlic is an example of a(n)

-Refer to above figure. In the absence of trade, how many Widgets does this country consume?

If a small country imposes a tariff, then

The principle benefit of tariff protection goes to

An export tariff will ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

-Refer to above figure. Given a tariff of $3 per unit, what is the country's consumer surplus?

-Refer to above figure. In the absence of trade, what is the country's consumer surplus?

Suppose the United States eliminates its tariff on ball bearings used in producing exports. Ball bearing prices in the United States would be expected to

The imposition of tariffs will help a nation attain which of the following goals?

A specific tariff provides home producers more protection when

If an import-competing firm is the only domestic producer of a good, then a transition from autarky to free trade will ________ domestic price, ________ producer surplus, ________ consumer surplus, and ________ overall domestic national welfare.

-Refer to above figure. The loss of Consumer Surplus due to the tariff equals ________.

The imposition of tariffs on imports results in deadweight (triangle) losses. These are

-Refer to above figure. What is the amount of efficiency loss resulting from imposition of the tariff?

-Refer to above figure. With free trade and no tariffs, what is the quantity of Widgets imported?

The most vocal political pressure for tariffs is generally made by

Which of the following are examples of goods that have been subject to voluntary export restraints?

Specific tariffs are

Introduction

World Trade: an Overview

Labor Productivity and Comparative Advantage: the Ricardian Model

Specific Factors and Income Distribution

Resources and Trade: the Heckscher-Ohlin Model

The Standard Trade Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Controversies in Trade Policy

National Income Accounting and the Balance of Payments

Exchange Rates and the Foreign Exchange Market: an Asset Approach

Money, Interest Rates, and Exchange Rates

Price Levels and the Exchange Rate in the Long Run

Output and the Exchange Rate in the Short Run

Fixed Exchange Rates and Foreign Exchange Intervention

International Monetary Systems: an Historical Overview

Financial Globalization: Opportunity and Crisis

Optimum Currency Areas and the Euro

Developing Countries: Growth, Crisis, and Reform

Filters

An export tariff will producer surplus, consumer surplus, government revenue, and overall domestic national welfare.

If an import-competing firm is the only domestic producer of a good, then a transition from autarky to free trade will domestic price, producer surplus, consumer surplus, and overall domestic national welfare.