Question 1

Which of the following statements is true?

Accepted Answer

A) an ad valorem tariff is a fixed sum per unit 
B) the U.S.does not allow exports tariffs 
C) in the case of a small country the cost of a tariff is split between the buyer and seller 
D) a specific tariff is a % of the value of the unit 
A) an ad valorem tariff is a fixed sum per unit 
B) the U.S.does not allow exports tariffs 
C) in the case of a small country the cost of a tariff is split between the buyer and seller 
D) a specific tariff is a % of the value of the unit B

Question 2

If a small nation increases the tariff on its import commodity,its:

Accepted Answer

A) consumption of the commodity increases 
B) production of the commodity decreases 
C) imports of the commodity increase 
D) domestic price of the commodity increases 
A) consumption of the commodity increases 
B) production of the commodity decreases 
C) imports of the commodity increase 
D) domestic price of the commodity increases D

Question 3

If the tariff rate in inputs is the same as the tariff rate of finished goods the effective rate of protection will be

Accepted Answer

A) the same as the nominal rate of protection 
B) zero 
C) larger than the nominal rate of protection 
D) maximized 
A) the same as the nominal rate of protection 
B) zero 
C) larger than the nominal rate of protection 
D) maximized A

Question 4

The imposition of an import tariff by a nation can be represented by a rotation of the:

Accepted Answer

A) nation's offer curve away from the axis measuring the commodity of its comparative advantage 
B) the nation's offer curve toward the axis measuring the commodity of its comparative advantage 
C) the other nation's offer curve toward the axis measuring the commodity of its comparative advantage 
D) the other nation's offer curve away from the axis measuring the commodity of its comparative advantage 
A) nation's offer curve away from the axis measuring the commodity of its comparative advantage 
B) the nation's offer curve toward the axis measuring the commodity of its comparative advantage 
C) the other nation's offer curve toward the axis measuring the commodity of its comparative advantage 
D) the other nation's offer curve away from the axis measuring the commodity of its comparative advantage

Question 5

Tariffs result in a loss of national social welfare because

Accepted Answer

A) domestic consumption decreases and domestic production increases. 
B) domestic consumption increases and foreign production increases. 
C) foreign consumption decreases and domestic production decreases. 
D) domestic consumption increases and domestic production decreases. 
A) domestic consumption decreases and domestic production increases. 
B) domestic consumption increases and foreign production increases. 
C) foreign consumption decreases and domestic production decreases. 
D) domestic consumption increases and domestic production decreases.

Question 6

The imposition of an import tariff by a small nation:

Accepted Answer

A) increases the nation's welfare 
B) reduces the nation's welfare 
C) leaves the nation's welfare unchanged 
D) any of the above is possible 
A) increases the nation's welfare 
B) reduces the nation's welfare 
C) leaves the nation's welfare unchanged 
D) any of the above is possible

Question 7

A tariff in a small country will benefit

Accepted Answer

A) domestic consumers. 
B) foreign producers. 
C) the government imposing the tariff. 
D) the world as a whole. 
A) domestic consumers. 
B) foreign producers. 
C) the government imposing the tariff. 
D) the world as a whole.

Question 8

A small nation is one which must have all of the following characteristics except:

Accepted Answer

A) It does not affect world price by its trading. 
B) It faces an infinitely elastic world supply curve for its import commodity. 
C) It faces an infinitely elastic world demand curve for its export commodity. 
D) It has a small geographic area. 
A) It does not affect world price by its trading. 
B) It faces an infinitely elastic world supply curve for its import commodity. 
C) It faces an infinitely elastic world demand curve for its export commodity. 
D) It has a small geographic area.

Question 9

Explain the difference between an ad valorem,specific and compound tariff

Accepted Answer

An ad valorem tariff is a percentage of

Question 10

Under what conditions can a tariff improve a nation's welfare?

Accepted Answer

When a large nation imposes a tariff dem

Question 11

The imposition of an import tariff by a small nation:

Accepted Answer

A) increases the relative price of the import commodity for domestic producers and consumers 
B) reduces the relative price of the import commodity for domestic producers and consumers 
C) increases the relative price of the import commodity for the nation as a whole 
D) any of the above is possible 
A) increases the relative price of the import commodity for domestic producers and consumers 
B) reduces the relative price of the import commodity for domestic producers and consumers 
C) increases the relative price of the import commodity for the nation as a whole 
D) any of the above is possible

Question 12

Using the concept of effective protection,explain how and why tariffs tend to vary with the level of processing of goods (that is,raw materials,intermediate goods,and finished goods).

Accepted Answer

Tariffs tend to increase with the degree

Question 13

Is there such thing as an optimum tariff for a small nation?

Accepted Answer

No.A large country can use a tariff to i

Question 14

The increase in producer surplus when a small nation imposes a tariff is measured by the area:

Accepted Answer

A) to the left of the supply curve between the commodity price with and without the tariff 
B) under the supply curve between the quantity produced with and without the tariff 
C) under the demand curve between the commodity price with and without the tariff 
D) none of the above. 
A) to the left of the supply curve between the commodity price with and without the tariff 
B) under the supply curve between the quantity produced with and without the tariff 
C) under the demand curve between the commodity price with and without the tariff 
D) none of the above.

Question 15

If a small nation increases the tariff on its import commodity:

Accepted Answer

A) the rent of domestic producers of the commodity increases 
B) the protection cost of the tariff decreases 
C) the deadweight loss decreases 
D) all of the above 
A) the rent of domestic producers of the commodity increases 
B) the protection cost of the tariff decreases 
C) the deadweight loss decreases 
D) all of the above

Question 16

With aᵢ=50%,tᵢ=0,and t=20%,g is:

Accepted Answer

A) 40% 
B) 20% 
C) 80% 
D) 0 
A) 40% 
B) 20% 
C) 80% 
D) 0

Question 17

The optimum tariff for a small nation is:

Accepted Answer

A) 100% 
B) 50% 
C) 0 
D) depends on elasticities 
A) 100% 
B) 50% 
C) 0 
D) depends on elasticities

Question 18

From the following figure,in which Dc and Sc refer,respectively to the domestic demand and supply curves of cloth,and SF and SF+T refer,respectively,to the world supply curve of cloth under free trade and with a 50% import tariff imposed by the nation on the importation of cloth,determine:
(a)the consumption,production effect,and the trade effect of the tariff.
(b)the reduction in consumer surplus,the increase in producer surplus or rent,the tariff revenue,and the protection cost or deadweight loss to the economy as a result of the tariff.

Accepted Answer

(a)The consumption effect is equal to BR

Question 19

The imposition of a tariff will

Accepted Answer

A) increase imports,decrease domestic production,and increase consumption 
B) decrease imports,increase domestic production,and decrease consumption 
C) decrease imports,decrease domestic production,and increase consumption 
D) increase imports,increase domestic production,and decrease consumption 
A) increase imports,decrease domestic production,and increase consumption 
B) decrease imports,increase domestic production,and decrease consumption 
C) decrease imports,decrease domestic production,and increase consumption 
D) increase imports,increase domestic production,and decrease consumption

Question 20

The imposition of an optimum tariff by a large nation:

Accepted Answer

A) improves its terms of trade 
B) reduces the volume of trade 
C) increases the nation's welfare 
D) all of the above 
A) improves its terms of trade 
B) reduces the volume of trade 
C) increases the nation's welfare 
D) all of the above

Which of the following statements is true?

If a small nation increases the tariff on its import commodity,its:

If the tariff rate in inputs is the same as the tariff rate of finished goods the effective rate of protection will be

The imposition of an import tariff by a nation can be represented by a rotation of the:

Tariffs result in a loss of national social welfare because

The imposition of an import tariff by a small nation:

A tariff in a small country will benefit

A small nation is one which must have all of the following characteristics except:

Explain the difference between an ad valorem,specific and compound tariff

Under what conditions can a tariff improve a nation's welfare?

The imposition of an import tariff by a small nation:

Using the concept of effective protection,explain how and why tariffs tend to vary with the level of processing of goods (that is,raw materials,intermediate goods,and finished goods).

Is there such thing as an optimum tariff for a small nation?

The increase in producer surplus when a small nation imposes a tariff is measured by the area:

If a small nation increases the tariff on its import commodity:

With aᵢ=50%,tᵢ=0,and t=20%,g is:

The optimum tariff for a small nation is:

The imposition of a tariff will

The imposition of an optimum tariff by a large nation:

Introduction

The Law of Comparative Advantage

The Standard Theory of International Trade

Demand and Supply, offer Curves, and the Terms of Trade

Factor Endowments and the Heckscher-Ohlin Theory

Economies of Scale, imperfect Competition, and International Trade

Economic Growth and International Trade

Nontariff Trade Barriers and the New Protectionism

Economic Integration: Customs Unions and Free Trade Areas

International Trade and Economic Development

International Resource Movements and Multinational Corporations

Balance of Payments

Foreign Exchange Markets and Exchange Rates

Exchange Rate Determination

The Price Adjustment Mechanism With Flexible and Fixed Exchange

The Income Adjustment Mechanism and Synthesis of Automatic

Open-Economy Macroeconomics: Adjustment Policies

Prices and Output in an Open Economy: Aggregate Demand and Aggregate Supply

Flexible Versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination

The International Monetary System: Past,present,and Future

Filters

Exam 8: Economic Growth and International Trade

Which of the following statements is true?

If a small nation increases the tariff on its import commodity,its:

If the tariff rate in inputs is the same as the tariff rate of finished goods the effective rate of protection will be

The imposition of an import tariff by a nation can be represented by a rotation of the:

Tariffs result in a loss of national social welfare because

The imposition of an import tariff by a small nation:

A tariff in a small country will benefit

A small nation is one which must have all of the following characteristics except:

Explain the difference between an ad valorem,specific and compound tariff

Under what conditions can a tariff improve a nation's welfare?

The imposition of an import tariff by a small nation:

Using the concept of effective protection,explain how and why tariffs tend to vary with the level of processing of goods (that is,raw materials,intermediate goods,and finished goods).

Is there such thing as an optimum tariff for a small nation?

The increase in producer surplus when a small nation imposes a tariff is measured by the area:

If a small nation increases the tariff on its import commodity:

With aᵢ=50%,tᵢ=0,and t=20%,g is:

The optimum tariff for a small nation is:

The imposition of a tariff will

The imposition of an optimum tariff by a large nation:

Introduction

The Law of Comparative Advantage

The Standard Theory of International Trade

Demand and Supply, offer Curves, and the Terms of Trade

Factor Endowments and the Heckscher-Ohlin Theory

Economies of Scale, imperfect Competition, and International Trade

Economic Growth and International Trade

Nontariff Trade Barriers and the New Protectionism

Economic Integration: Customs Unions and Free Trade Areas

International Trade and Economic Development

International Resource Movements and Multinational Corporations

Balance of Payments

Foreign Exchange Markets and Exchange Rates

Exchange Rate Determination

The Price Adjustment Mechanism With Flexible and Fixed Exchange

The Income Adjustment Mechanism and Synthesis of Automatic

Open-Economy Macroeconomics: Adjustment Policies

Prices and Output in an Open Economy: Aggregate Demand and Aggregate Supply

Flexible Versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination

The International Monetary System: Past,present,and Future

Filters