Question 1

The imposition of an import tariff by a nation results in:

Accepted Answer

A)  an increase in relative price of the nation's import commodity 
B)  an increase in the nation's production of its importable commodity 
C)  reduces the real return of the nation's abundant factor 
D)  all of the above 
A)  an increase in relative price of the nation's import commodity 
B)  an increase in the nation's production of its importable commodity 
C)  reduces the real return of the nation's abundant factor 
D)  all of the above

Question 2

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 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

Question 4

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

Accepted Answer

When a large nation imposes a tariff dem

Question 5

Which of the following statements is incorrect?

Accepted Answer

A)  An ad valorem tariff is expressed as a percentage of the value of the traded commodity 
B)  a specific tariff is expressed as a fixed sum of the value of the traded commodity. 
C)  export tariffs are prohibited by the U.S. Constitution 
D)  The U.S. uses exclusively the specific tariff 
A)  An ad valorem tariff is expressed as a percentage of the value of the traded commodity 
B)  a specific tariff is expressed as a fixed sum of the value of the traded commodity. 
C)  export tariffs are prohibited by the U.S. Constitution 
D)  The U.S. uses exclusively the specific tariff

Question 6

A tariff in a large country

Accepted Answer

A)  will not benefit the country or the world. 
B)  will benefit the country but not the world. 
C)  will benefit the world but not the country. 
D)  may benefit the country but not the world. 
A)  will not benefit the country or the world. 
B)  will benefit the country but not the world. 
C)  will benefit the world but not the country. 
D)  may benefit the country but not the world.

Question 7

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

Question 8

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 9

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 10

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

The imposition of an import tariff by a nation results in:

The imposition of an import tariff by a small nation:

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

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

Which of the following statements is incorrect?

A tariff in a large country

Which of the following statements is true?

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:

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).

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 imposition of an import tariff by a nation results in:

The imposition of an import tariff by a small nation:

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

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

Which of the following statements is incorrect?

A tariff in a large country

Which of the following statements is true?

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:

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).

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