Exam 40: International Trade Restrictions

The figure below shows the demand (D)and supply (S)curves of corn syrups. Figure 21.3 In Figure 21.3, with an import quota of 30 gallons of corn syrup, what is the new equilibrium price?

Proponents of strategic trade policy contend that:

A monopoly exists when there is only one producer in an industry, and no close substitutes for the product exist.

The figure given below depicts the negatively sloped demand and positively sloped supply curves of wheat in a country. Figure 21.2 According to Figure 21.2, if the world price of wheat is $25 and a tariff of $10 is imposed by the domestic government, the total tariff revenue collected by the government is:

The world output is higher if the countries follow restrictive trade policies rather than free trade.

Creating conditions for fair trade by limiting imports will make the domestic consumers better off, as they will be required to pay low prices for the products.

Domestic firms often claim that foreign firms have an unfair advantage because foreign workers are willing to work for very low wages.

One of the negative impacts of export subsidy is that:

The figure given below depicts the negatively sloped demand and positively sloped supply curves of wheat in a country. Figure 21.2 In Figure 21.2, if the world price of wheat is $25 and a $10 tariff is imposed:

In the light of the infant industry argument, identify the industry which is likely to have substantially high initial costs.

When dealing with strategic trade policy, one practical problem for government is the likelihood of retaliation by the foreign government.

The most successful free trade agreements achieve all of the following goals, except:

The figure below shows the demand (D)and supply (S)curves of cocoa in the U.S. Figure 21.4 From Figure 21.4, determine the total volume of U.S.cocoa imports if its government imposes tariff at the rate of $2 per pound on cocoa.

Since individual consumers do not know how much of the price they pay for a commodity is due to protection, consumers rarely lobby their political representatives to eliminate protection and reduce prices.

The basic difference between a tariff and quota is that:

Commercial policy is government policy that influences:

The figure below shows the demand (D)and supply (S)curves of corn syrups. Figure 21.3 In Figure 21.3, if the world price per gallon is $8, then without quotas:

Protecting infant industries from foreign competition may make sense, but only until the industry matures.

According to strategic trade policy, international trade largely involves firms which:

Which of the following statements about international trade restrictions is true?