Question 1

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 C

Question 2

The optimum tariff is the tariff rate that

Accepted Answer

A)  saved the most domestic jobs 
B)  generates the largest tax revenue 
C)  maximizes domestic production 
D)  maximizes the net benefit from improving the improvement in the terms of trade relative to loss from the reduction in the volume of trade 
A)  saved the most domestic jobs 
B)  generates the largest tax revenue 
C)  maximizes domestic production 
D)  maximizes the net benefit from improving the improvement in the terms of trade relative to loss from the reduction in the volume of trade D

Question 3

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. A

Question 4

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 5

Explain the redistribution effects of a tariff.

Accepted Answer

A tariff increases the price of imports

Question 6

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 7

Which of the following statements is u>incorrect with respect to the rate of effective protection?

Accepted Answer

A)  For given values of aᵢ and tᵢ, g is larger the greater is t. 
B)  For a given value of t and tᵢ, g is larger the greater is aᵢ. 
C)  The rate of effective protection, g, exceeds t when tᵢ is less than t. 
D)  When aᵢtᵢ exceeds t, the rate of effective protection is positive. 
A)  For given values of aᵢ and tᵢ, g is larger the greater is t. 
B)  For a given value of t and tᵢ, g is larger the greater is aᵢ. 
C)  The rate of effective protection, g, exceeds t when tᵢ is less than t. 
D)  When aᵢtᵢ exceeds t, the rate of effective protection is positive.

Question 8

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 9

According to the Stolper-Samuelson theorem,the imposition of a tariff by a nation:

Accepted Answer

A)  increases the real return of the nation's abundant factor 
B)  increases the real return of the nation's scarce factor 
C)  reduces the real return of the nation's scarce factor 
D)  any of the above is possible 
A)  increases the real return of the nation's abundant factor 
B)  increases the real return of the nation's scarce factor 
C)  reduces the real return of the nation's scarce factor 
D)  any of the above is possible

Question 10

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

Question 11

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 12

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 13

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 14

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

Question 15

A good is produced using $160 in imported inputs.The current domestic price of the good is $200.For each of the following cases,find the level of effective protection.
a. The nominal tariff rate on the good is 10%, and there is no tariff on the inputs.
b. The nominal tariff rate on the good is 10%, and there is a 10% tariff on the inputs.
c. The nominal tariff rate on the good is 0%, and there is a 10% tariff on the inputs.

Accepted Answer

a.50% 
b.1

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

In general,for the last 50 years tariff rates around the world have been

Accepted Answer

A)  rising 
B)  falling 
C)  relatively unchanged 
D)  volatile - sometimes rising and sometimes falling quite dramatically 
A)  rising 
B)  falling 
C)  relatively unchanged 
D)  volatile - sometimes rising and sometimes falling quite dramatically

Question 18

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 19

The imposition of an import tariff by a large nation:

Accepted Answer

A)  increases the nation's terms of trade 
B)  reduces the volume of trade 
C)  may increase or reduce the nation's welfare 
D)  all of the above 
A)  increases the nation's terms of trade 
B)  reduces the volume of trade 
C)  may increase or reduce the nation's welfare 
D)  all of the above

Question 20

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

Accepted Answer

An ad valorem tariff is a percentage of

The optimum tariff for a small nation is:

The optimum tariff is the tariff rate that

Tariffs result in a loss of national social welfare because

Explain the redistribution effects of a tariff.

A tariff in a small country will benefit

Which of the following statements is u>incorrect with respect to the rate of effective protection?

The imposition of a tariff will

According to the Stolper-Samuelson theorem,the imposition of a tariff by a nation:

The imposition of an optimum tariff by a large nation:

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

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

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

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

With aᵢ=50%,tᵢ=0,and t=20%,g is:

In general,for the last 50 years tariff rates around the world have been

The imposition of an import tariff by a small nation:

The imposition of an import tariff by a large nation:

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

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 Heckscherohlin 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 Rates

The Income Adjustment Mechanism and Synthesis of Automatic Adjustments

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 Answers to Selected Problems on Web

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Exam 8: Trade Restrictions: Tariffs

The optimum tariff for a small nation is:

The optimum tariff is the tariff rate that

Tariffs result in a loss of national social welfare because

Explain the redistribution effects of a tariff.

A tariff in a small country will benefit

Which of the following statements is u>incorrect with respect to the rate of effective protection?

The imposition of a tariff will

According to the Stolper-Samuelson theorem,the imposition of a tariff by a nation:

The imposition of an optimum tariff by a large nation:

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

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

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

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

With aᵢ=50%,tᵢ=0,and t=20%,g is:

In general,for the last 50 years tariff rates around the world have been

The imposition of an import tariff by a small nation:

The imposition of an import tariff by a large nation:

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

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 Heckscherohlin 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 Rates

The Income Adjustment Mechanism and Synthesis of Automatic Adjustments

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 Answers to Selected Problems on Web

Filters