Question 1

The protective effect of a tariff occurs to the extent that less efficient domestic production is substituted for more efficient foreign production.

Accepted Answer

A) True 
 B)False

Question 2

Although an import tariff provides the domestic government additional tax revenue,it benefits domestic consumers at the expense of domestic producers.

Accepted Answer

A) True 
 B)False

Question 3

Figure 4.4 Market for Gasoline in a Small Nation  
-Figure 4.4 represents the market for gasoline in a small nation.The free trade world price of gasoline is $3.50.Suppose this small nation imposes a tariff on gasoline of $.50 per gallon.The change in consumer surplus would be

Accepted Answer

A)  area a + b 
B)  area a 
C)  area a + b + c + d + e 
D)  area a + b + f + g + h 
A)  area a + b 
B)  area a 
C)  area a + b + c + d + e 
D)  area a + b + f + g + h

Question 4

Figure 4.2.Import Tariff Levied by a "Large" Country  
-Consider Figure 4.2.Of the $100 tariff,$____ is passed on to the U.S.consumer via a higher price,while $____ is borne by the foreign exporter; the U.S.terms of trade:

Accepted Answer

A)  $25,$75,improve 
B)  $25,$75,worsen 
C)  $75,$25,improve 
D)  $75,$25,worsen 
A)  $25,$75,improve 
B)  $25,$75,worsen 
C)  $75,$25,improve 
D)  $75,$25,worsen

Question 5

An import tariff will worsen the terms of trade for a "small" country but improve the terms of trade for a "large" country.

Accepted Answer

A) True 
 B)False

Question 6

Consider Figure 4.1.The tariff would be prohibitive (i.e.,eliminate imports)if it equaled:

Accepted Answer

A)  $2 
B)  $3 
C)  $4 
D)  $5 
A)  $2 
B)  $3 
C)  $4 
D)  $5

Question 7

Consider Figure 4.1.In the absence of trade,Mexico's producer surplus and consumer surplus respectively equal:

Accepted Answer

A)  $120,$240 
B)  $180,$180 
C)  $180,$320 
D)  $240,$240 
A)  $120,$240 
B)  $180,$180 
C)  $180,$320 
D)  $240,$240

Question 8

-Consider Table 4.1.The effective tariff rate equals:

Accepted Answer

A)  11.1 percent 
B)  16.7 percent 
C)  50.0 percent 
D)  100.0 percent 
A)  11.1 percent 
B)  16.7 percent 
C)  50.0 percent 
D)  100.0 percent

Question 9

There is widespread agreement among economists that import tariffs increase overall employment in the levying country.

Accepted Answer

A) True 
 B)False

Question 10

If a "small" country levies a tariff on an imported good,its overall welfare increases if the monetary value of the tariff's consumption effect plus protective effect is less than the monetary value of the terms-of-trade effect.

Accepted Answer

A) True 
 B)False

Question 11

A tax of 15 percent per imported item would be an example of:

Accepted Answer

A)  Ad valorem tariff 
B)  Specific tariff 
C)  Effective tariff 
D)  Compound tariff 
A)  Ad valorem tariff 
B)  Specific tariff 
C)  Effective tariff 
D)  Compound tariff

Question 12

Figure 4.2.Import Tariff Levied by a "Large" Country  
-Referring to Figure 4.2,the tariff's deadweight welfare loss to the United States totals:

Accepted Answer

A)  $450 
B)  $550 
C)  $650 
D)  $750 
A)  $450 
B)  $550 
C)  $650 
D)  $750

Question 13

Which of the following is a fixed percentage of the value of an imported product as it enters the country?

Accepted Answer

A)  Specific tariff 
B)  Ad valorem tariff 
C)  Nominal tariff 
D)  Effective tariff 
A)  Specific tariff 
B)  Ad valorem tariff 
C)  Nominal tariff 
D)  Effective tariff

Question 14

Is it possible for a low nominal tariff rate to understate the effective rate of protection? What is tariff escalation?

Accepted Answer

Yes.In some countries,the effective rate

Question 15

According to Figure 4.1,Mexican manufacturers gain ____ because of the tariff.

Accepted Answer

A)  $75 
B)  $85 
C)  $95 
D)  $105 
A)  $75 
B)  $85 
C)  $95 
D)  $105

Question 16

-Consider Table 4.1.Prior to the tariff,the total price of domestically-produced VCRs is:

Accepted Answer

A)  $150 
B)  $200 
C)  $225 
D)  $250 
A)  $150 
B)  $200 
C)  $225 
D)  $250

Question 17

The imposition of tariffs on imports results in deadweight welfare losses for the home economy.These losses consist of the:

Accepted Answer

A)  Protective effect plus consumption effect 
B)  Redistribution effect plus revenue effect 
C)  Revenue effect plus protective effect 
D)  Consumption effect plus redistribution effect 
A)  Protective effect plus consumption effect 
B)  Redistribution effect plus revenue effect 
C)  Revenue effect plus protective effect 
D)  Consumption effect plus redistribution effect

Question 18

-Consider Table 4.1.The nominal tariff rate on imported VCRs equals:

Accepted Answer

A)  11.1 percent 
B)  12.5 percent 
C)  16.7 percent 
D)  50.0 percent 
A)  11.1 percent 
B)  12.5 percent 
C)  16.7 percent 
D)  50.0 percent

Question 19

If I purchase a stereo from South Korea,I obtain the stereo and South Korea obtains the dollars.But if I purchase a stereo produced in the United States,I obtain the stereo and the dollars remain in America.This line of reasoning is:

Accepted Answer

A)  Valid for stereos,but not for most products imported by the United States 
B)  Valid for most products imported by the United States,but not for stereos 
C)  Deceptive since Koreans eventually spend the dollars on U.S.goods 
D)  Deceptive since the dollars spent on a stereo built in the United States eventually wind up overseas 
A)  Valid for stereos,but not for most products imported by the United States 
B)  Valid for most products imported by the United States,but not for stereos 
C)  Deceptive since Koreans eventually spend the dollars on U.S.goods 
D)  Deceptive since the dollars spent on a stereo built in the United States eventually wind up overseas

Question 20

According to Figure 4.1,the deadweight cost of the tariff totals:

Accepted Answer

A)  $60 
B)  $70 
C)  $80 
D)  $90 
A)  $60 
B)  $70 
C)  $80 
D)  $90

The protective effect of a tariff occurs to the extent that less efficient domestic production is substituted for more efficient foreign production.

Although an import tariff provides the domestic government additional tax revenue,it benefits domestic consumers at the expense of domestic producers.

Figure 4.4 Market for Gasoline in a Small Nation -Figure 4.4 represents the market for gasoline in a small nation.The free trade world price of gasoline is $3.50.Suppose this small nation imposes a tariff on gasoline of $.50 per gallon.The change in consumer surplus would be

Figure 4.2.Import Tariff Levied by a "Large" Country -Consider Figure 4.2.Of the $100 tariff,$ is passed on to the U.S.consumer via a higher price,while $ is borne by the foreign exporter; the U.S.terms of trade:

An import tariff will worsen the terms of trade for a "small" country but improve the terms of trade for a "large" country.

Consider Figure 4.1.The tariff would be prohibitive (i.e.,eliminate imports)if it equaled:

Consider Figure 4.1.In the absence of trade,Mexico's producer surplus and consumer surplus respectively equal:

-Consider Table 4.1.The effective tariff rate equals:

There is widespread agreement among economists that import tariffs increase overall employment in the levying country.

If a "small" country levies a tariff on an imported good,its overall welfare increases if the monetary value of the tariff's consumption effect plus protective effect is less than the monetary value of the terms-of-trade effect.

A tax of 15 percent per imported item would be an example of:

Figure 4.2.Import Tariff Levied by a "Large" Country -Referring to Figure 4.2,the tariff's deadweight welfare loss to the United States totals:

Which of the following is a fixed percentage of the value of an imported product as it enters the country?

Is it possible for a low nominal tariff rate to understate the effective rate of protection? What is tariff escalation?

According to Figure 4.1,Mexican manufacturers gain ____ because of the tariff.

-Consider Table 4.1.Prior to the tariff,the total price of domestically-produced VCRs is:

The imposition of tariffs on imports results in deadweight welfare losses for the home economy.These losses consist of the:

-Consider Table 4.1.The nominal tariff rate on imported VCRs equals:

If I purchase a stereo from South Korea,I obtain the stereo and South Korea obtains the dollars.But if I purchase a stereo produced in the United States,I obtain the stereo and the dollars remain in America.This line of reasoning is:

According to Figure 4.1,the deadweight cost of the tariff totals:

The International Economy and Globalization

Foundations of Modern Trade Theory: Comparative Advantage

Sources of Comparative Advantage

Nontariff Trade Barriers

Trade Regulations and Industrial Policies

Trade Policies for the Developing Nations

Regional Trading Arrangements

International Factor Movements and Multinational Enterprises

The Balance of Payments

Foreign Exchange

Exchange-Rate Determination

Mechanisms of International Adjustment

Exchange-Rate Adjustments and the Balance of Payments

Exchange-Rate Systems and Currency Crises

Macroeconomic Policy in an Open Economy

International Banking: Reserves, Debt, and Risk

Filters

Exam 4: Tariffs

The protective effect of a tariff occurs to the extent that less efficient domestic production is substituted for more efficient foreign production.

Although an import tariff provides the domestic government additional tax revenue,it benefits domestic consumers at the expense of domestic producers.

Figure 4.4 Market for Gasoline in a Small Nation -Figure 4.4 represents the market for gasoline in a small nation.The free trade world price of gasoline is $3.50.Suppose this small nation imposes a tariff on gasoline of $.50 per gallon.The change in consumer surplus would be

Figure 4.2.Import Tariff Levied by a "Large" Country -Consider Figure 4.2.Of the $100 tariff,$____ is passed on to the U.S.consumer via a higher price,while $____ is borne by the foreign exporter; the U.S.terms of trade:

An import tariff will worsen the terms of trade for a "small" country but improve the terms of trade for a "large" country.

Consider Figure 4.1.The tariff would be prohibitive (i.e.,eliminate imports)if it equaled:

Consider Figure 4.1.In the absence of trade,Mexico's producer surplus and consumer surplus respectively equal:

-Consider Table 4.1.The effective tariff rate equals:

There is widespread agreement among economists that import tariffs increase overall employment in the levying country.

If a "small" country levies a tariff on an imported good,its overall welfare increases if the monetary value of the tariff's consumption effect plus protective effect is less than the monetary value of the terms-of-trade effect.

A tax of 15 percent per imported item would be an example of:

Figure 4.2.Import Tariff Levied by a "Large" Country -Referring to Figure 4.2,the tariff's deadweight welfare loss to the United States totals:

Which of the following is a fixed percentage of the value of an imported product as it enters the country?

Is it possible for a low nominal tariff rate to understate the effective rate of protection? What is tariff escalation?

According to Figure 4.1,Mexican manufacturers gain ____ because of the tariff.

-Consider Table 4.1.Prior to the tariff,the total price of domestically-produced VCRs is:

The imposition of tariffs on imports results in deadweight welfare losses for the home economy.These losses consist of the:

-Consider Table 4.1.The nominal tariff rate on imported VCRs equals:

If I purchase a stereo from South Korea,I obtain the stereo and South Korea obtains the dollars.But if I purchase a stereo produced in the United States,I obtain the stereo and the dollars remain in America.This line of reasoning is:

According to Figure 4.1,the deadweight cost of the tariff totals:

The International Economy and Globalization

Foundations of Modern Trade Theory: Comparative Advantage

Sources of Comparative Advantage

Nontariff Trade Barriers

Trade Regulations and Industrial Policies

Trade Policies for the Developing Nations

Regional Trading Arrangements

International Factor Movements and Multinational Enterprises

The Balance of Payments

Foreign Exchange

Exchange-Rate Determination

Mechanisms of International Adjustment

Exchange-Rate Adjustments and the Balance of Payments

Exchange-Rate Systems and Currency Crises

Macroeconomic Policy in an Open Economy

International Banking: Reserves, Debt, and Risk

Filters

Figure 4.2.Import Tariff Levied by a "Large" Country -Consider Figure 4.2.Of the $100 tariff,$ is passed on to the U.S.consumer via a higher price,while $ is borne by the foreign exporter; the U.S.terms of trade: