Question 1

A policy of tariff reduction in the computer industry is

Accepted Answer

A)  in the interest of the United States as a whole and in the interest of computer producing regions of the country. 
B)  in the interest of the United States as a whole but not in the interest of computer producing regions of the country. 
C)  not in the interest of the United States as a whole but in the interests of computer producing regions of the country. 
D)  not in the interest of the United States as a whole and not in the interests of computer consumers. 
E)  not in the interest of the United States as a whole but in the interests of foreign computer producers. 
A)  in the interest of the United States as a whole and in the interest of computer producing regions of the country. 
B)  in the interest of the United States as a whole but not in the interest of computer producing regions of the country. 
C)  not in the interest of the United States as a whole but in the interests of computer producing regions of the country. 
D)  not in the interest of the United States as a whole and not in the interests of computer consumers. 
E)  not in the interest of the United States as a whole but in the interests of foreign computer producers.

Question 2

The U.S. sugar quota

Accepted Answer

A)  generates government revenue. 
B)  results in net welfare benefits to the U.S. economy. 
C)  results in benefits to sugar producers that exceed the cost to consumers. 
D)  results in costs to consumers that exceed the benefits to sugar producers. 
E)  does not result in an efficiency loss. 
A)  generates government revenue. 
B)  results in net welfare benefits to the U.S. economy. 
C)  results in benefits to sugar producers that exceed the cost to consumers. 
D)  results in costs to consumers that exceed the benefits to sugar producers. 
E)  does not result in an efficiency loss.

Question 3

If an import-competing firm is imperfectly competitive, then under free trade an export tariff will ________ domestic market price, ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

Accepted Answer

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

Question 4

It is argued that a tariff may help promote employment in a single industry, but is not likely to help employment in general. Discuss.

Accepted Answer

A general tariff on all imports is equiv

Question 5

In the country levying the tariff, the tariff will

Accepted Answer

A)  increase both consumer and producer surplus. 
B)  decrease both the consumer and producer surplus. 
C)  decrease consumer surplus and increase producer surplus. 
D)  increase consumer surplus and decrease producer surplus. 
E)  decrease consumer surplus but leave producers surplus unchanged. 
A)  increase both consumer and producer surplus. 
B)  decrease both the consumer and producer surplus. 
C)  decrease consumer surplus and increase producer surplus. 
D)  increase consumer surplus and decrease producer surplus. 
E)  decrease consumer surplus but leave producers surplus unchanged.

Question 6

The fact that industrialized countries levy very low or no tariff on raw materials and semi processed goods

Accepted Answer

A)  helps developing countries export manufactured products. 
B)  has no effect on developing country exports. 
C)  hurts developing country efforts to export manufactured goods. 
D)  hurts developing country efforts to export raw materials. 
E)  does not affect industrialized countries' exports. 
A)  helps developing countries export manufactured products. 
B)  has no effect on developing country exports. 
C)  hurts developing country efforts to export manufactured goods. 
D)  hurts developing country efforts to export raw materials. 
E)  does not affect industrialized countries' exports.

Question 7

Suppose an import-competing firm is imperfectly competitive. Replacement of an export tariff with an import quota that yields the same level of imports will ________ market price, ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

Accepted Answer

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

Question 8

A lower tariff on imported steel would most likely benefit

Accepted Answer

A)  foreign producers at the expense of domestic consumers. 
B)  domestic manufacturers of steel. 
C)  domestic consumers of steel. 
D)  workers in the steel industry. 
E)  foreign consumers of steel. 
A)  foreign producers at the expense of domestic consumers. 
B)  domestic manufacturers of steel. 
C)  domestic consumers of steel. 
D)  workers in the steel industry. 
E)  foreign consumers of steel.

Question 9

The two deadweight triangles are the Consumption distortion and Production distortion losses. It is easy to understand why the Consumption distortion constitutes a loss for society. After all, it raises the prices of goods to consumers, and even causes some consumers to drop out of the market altogether. It seems paradoxical that the Production distortion is considered an equivalent burden on society. After all, in this case, profits increase, and additional production (with its associated employment) comes on line. This would seem to be an offset rather than an addition to the burden or loss borne by society. Explain why the Production distortion is indeed a loss to society, and what is wrong with the logic that leads to the apparent paradox.

Accepted Answer

The Production Distortion represents an

Question 10

An export subsidy 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 11

The change in the economic welfare of a country associated with an increase in a tariff equals

Accepted Answer

A)  efficiency loss - terms of trade gain. 
B)  efficiency gain - terms of trade loss. 
C)  efficiency loss + tax revenue gain. 
D)  efficiency loss + tax revenue gain + terms of trade gain. 
E)  efficiency loss - tax revenue gain. 
A)  efficiency loss - terms of trade gain. 
B)  efficiency gain - terms of trade loss. 
C)  efficiency loss + tax revenue gain. 
D)  efficiency loss + tax revenue gain + terms of trade gain. 
E)  efficiency loss - tax revenue gain.

A policy of tariff reduction in the computer industry is

The U.S. sugar quota

If an import-competing firm is imperfectly competitive, then under free trade an export tariff will domestic market price, producer surplus, consumer surplus, government revenue, and overall domestic national welfare.

It is argued that a tariff may help promote employment in a single industry, but is not likely to help employment in general. Discuss.

In the country levying the tariff, the tariff will

The fact that industrialized countries levy very low or no tariff on raw materials and semi processed goods

Suppose an import-competing firm is imperfectly competitive. Replacement of an export tariff with an import quota that yields the same level of imports will market price, producer surplus, consumer surplus, government revenue, and overall domestic national welfare.

A lower tariff on imported steel would most likely benefit

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

The change in the economic welfare of a country associated with an increase in a tariff equals

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

Exam 9: The Instruments of Trade Policy

A policy of tariff reduction in the computer industry is

The U.S. sugar quota

If an import-competing firm is imperfectly competitive, then under free trade an export tariff will ________ domestic market price, ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

It is argued that a tariff may help promote employment in a single industry, but is not likely to help employment in general. Discuss.

In the country levying the tariff, the tariff will

The fact that industrialized countries levy very low or no tariff on raw materials and semi processed goods

A lower tariff on imported steel would most likely benefit

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

The change in the economic welfare of a country associated with an increase in a tariff equals

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

If an import-competing firm is imperfectly competitive, then under free trade an export tariff will domestic market price, producer surplus, consumer surplus, government revenue, and overall domestic national welfare.

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