Question 1

Table 4.1. Production Costs and Prices of Imported and Domestic VCRs
  
-Consider Table 4.1.Prior to the tariff,domestic value added equals:

Accepted Answer

A)  $25 
B)  $50 
C)  $75 
D)  $100 
A)  $25 
B)  $50 
C)  $75 
D)  $100

Question 2

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico, a "small" nation that is unable to affect the world price.
Figure 4.1. Import Tariff Levied by a "Small" Country
  
-According to Figure 4.1,the tariff results in the Mexican government collecting:

Accepted Answer

A)  $100 
B)  $120 
C)  $140 
D)  $160 
A)  $100 
B)  $120 
C)  $140 
D)  $160

Question 3

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 4

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 5

Assume that the United States imports televisions from Taiwan at a price of $300 per unit and that these televisions are subject to an import tariff of 25 percent.Also assume that U.S.components are used in the televisions assembled by Taiwan and that these components have a value of $100.Under the Offshore Assembly Provision of U.S.tariff policy,the price of an imported television to the U.S.consumer after the tariff has been levied is $375

Accepted Answer

A) True 
 B)False

Question 6

Producer surplus is the revenue producers receive over and above the minimum necessary for production.

Accepted Answer

A) True 
 B)False

Question 7

Under the Offshore Assembly Provision of U.S.tariff policy,U.S.import duties apply only to the value added in the foreign assembly process,provided that U.S.-made components are used by overseas companies in their assembly operations.

Accepted Answer

A) True 
 B)False

Question 8

Refer to Exhibit 4.2.The tariff leads to an increase in Canadian consumer surplus totaling $11,000.

Accepted Answer

A) True 
 B)False

Question 9

Relatively low wages in Mexico make it impossible for U.S.manufacturers of labor-intensive goods to compete against Mexican manufacturers.

Accepted Answer

A) True 
 B)False

Question 10

Graphically,consumer surplus is represented by the area above the demand curve and below the product's market price.

Accepted Answer

A) True 
 B)False

Question 11

A tariff on steel imports tends to improve the competitiveness of domestic automobile companies.

Accepted Answer

A) True 
 B)False

Question 12

Assume the United States is a large consumer of steel that is able to influence the world price. Its demand and supply schedules are respectively denoted by DU.S. and SU.S. in Figure 4.2. The overall (United States plus world) supply schedule of steel is denoted by SU.S.?W.
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

Refer to Exhibit 4.2.The tariff's revenue effect equals $6,000.

Accepted Answer

A) True 
 B)False

Question 14

If we consider the interests of both consumers and producers,then a policy of tariff reduction in the U.S.auto industry is:

Accepted Answer

A)  In the interest of the United States as a whole, but not in the interest of auto-producing states 
B)  In the interest of the United States as a whole, and in the interest of auto-producing states 
C)  Not in the interest of the United States as a whole, nor in the interest of auto-producing states 
D)  Not in the interest of the United States as a whole, but is in the interest of auto-producing states 
A)  In the interest of the United States as a whole, but not in the interest of auto-producing states 
B)  In the interest of the United States as a whole, and in the interest of auto-producing states 
C)  Not in the interest of the United States as a whole, nor in the interest of auto-producing states 
D)  Not in the interest of the United States as a whole, but is in the interest of auto-producing states

Question 15

With a compound duty,its "specific" portion neutralizes the cost disadvantage of domestic manufacturers that results from tariff protection granted to domestic suppliers of raw materials,and the "ad valorem" portion of the duty grants protection to the finished-goods industry.

Accepted Answer

A) True 
 B)False

Question 16

When a government allows raw materials and other intermediate products to enter a country duty free,its tariff policy generally results in a:

Accepted Answer

A)  Effective tariff rate less than the nominal tariff rate 
B)  Nominal tariff rate less than the effective tariff rate 
C)  Rise in both nominal and effective tariff rates 
D)  Fall in both nominal and effective tariff rates 
A)  Effective tariff rate less than the nominal tariff rate 
B)  Nominal tariff rate less than the effective tariff rate 
C)  Rise in both nominal and effective tariff rates 
D)  Fall in both nominal and effective tariff rates

Question 17

Assume the United States is a large consumer of steel that is able to influence the world price. Its demand and supply schedules are respectively denoted by DU.S. and SU.S. in Figure 4.2. The overall (United States plus world) supply schedule of steel is denoted by SU.S.?W.
Figure 4.2. Import Tariff Levied by a "Large" Country
  
-Suppose an importer of steel is required to pay a tariff of $20 per ton plus 5 percent of the value of steel.This is an example of a (an):

Accepted Answer

A)  Specific tariff 
B)  Ad valorem tariff 
C)  Compound tariff 
D)  Tariff quota 
A)  Specific tariff 
B)  Ad valorem tariff 
C)  Compound tariff 
D)  Tariff quota

Question 18

Assume the United States adopts a tariff quota on steel in which the quota is set at 2 million tons,the within-quota tariff rate equals 5 percent,and the over-quota tariff rate equals 10 percent.Suppose the U.S.imports 1 million tons of steel.The resulting revenue effect of the tariff quota would accrue to:

Accepted Answer

A)  The U.S. government only 
B)  U.S. importing companies only 
C)  Foreign exporting companies only 
D)  The U.S. government and either U.S. importers or foreign exporters 
A)  The U.S. government only 
B)  U.S. importing companies only 
C)  Foreign exporting companies only 
D)  The U.S. government and either U.S. importers or foreign exporters

Question 19

During a business recession,when cheaper products are purchased,a specific tariff provides domestic producers a greater amount of protection against import-competing goods.

Accepted Answer

A) True 
 B)False

Question 20

Bonded warehouses and foreign trade zones have the effect of allowing domestic importers to postpone and prorate over time their import duty obligations.

Accepted Answer

A) True 
 B)False

Table 4.1. Production Costs and Prices of Imported and Domestic VCRs -Consider Table 4.1.Prior to the tariff,domestic value added equals:

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico, a "small" nation that is unable to affect the world price. Figure 4.1. Import Tariff Levied by a "Small" Country -According to Figure 4.1,the tariff results in the Mexican government collecting:

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

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:

Producer surplus is the revenue producers receive over and above the minimum necessary for production.

Under the Offshore Assembly Provision of U.S.tariff policy,U.S.import duties apply only to the value added in the foreign assembly process,provided that U.S.-made components are used by overseas companies in their assembly operations.

Refer to Exhibit 4.2.The tariff leads to an increase in Canadian consumer surplus totaling $11,000.

Relatively low wages in Mexico make it impossible for U.S.manufacturers of labor-intensive goods to compete against Mexican manufacturers.

Graphically,consumer surplus is represented by the area above the demand curve and below the product's market price.

A tariff on steel imports tends to improve the competitiveness of domestic automobile companies.

Refer to Exhibit 4.2.The tariff's revenue effect equals $6,000.

If we consider the interests of both consumers and producers,then a policy of tariff reduction in the U.S.auto industry is:

With a compound duty,its "specific" portion neutralizes the cost disadvantage of domestic manufacturers that results from tariff protection granted to domestic suppliers of raw materials,and the "ad valorem" portion of the duty grants protection to the finished-goods industry.

When a government allows raw materials and other intermediate products to enter a country duty free,its tariff policy generally results in a:

During a business recession,when cheaper products are purchased,a specific tariff provides domestic producers a greater amount of protection against import-competing goods.

Bonded warehouses and foreign trade zones have the effect of allowing domestic importers to postpone and prorate over time their import duty obligations.

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

Balance-of-payments Adjustments

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

Table 4.1. Production Costs and Prices of Imported and Domestic VCRs -Consider Table 4.1.Prior to the tariff,domestic value added equals:

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico, a "small" nation that is unable to affect the world price. Figure 4.1. Import Tariff Levied by a "Small" Country -According to Figure 4.1,the tariff results in the Mexican government collecting:

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

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:

Producer surplus is the revenue producers receive over and above the minimum necessary for production.

Under the Offshore Assembly Provision of U.S.tariff policy,U.S.import duties apply only to the value added in the foreign assembly process,provided that U.S.-made components are used by overseas companies in their assembly operations.

Refer to Exhibit 4.2.The tariff leads to an increase in Canadian consumer surplus totaling $11,000.

Relatively low wages in Mexico make it impossible for U.S.manufacturers of labor-intensive goods to compete against Mexican manufacturers.

Graphically,consumer surplus is represented by the area above the demand curve and below the product's market price.

A tariff on steel imports tends to improve the competitiveness of domestic automobile companies.

Refer to Exhibit 4.2.The tariff's revenue effect equals $6,000.

If we consider the interests of both consumers and producers,then a policy of tariff reduction in the U.S.auto industry is:

With a compound duty,its "specific" portion neutralizes the cost disadvantage of domestic manufacturers that results from tariff protection granted to domestic suppliers of raw materials,and the "ad valorem" portion of the duty grants protection to the finished-goods industry.

When a government allows raw materials and other intermediate products to enter a country duty free,its tariff policy generally results in a:

During a business recession,when cheaper products are purchased,a specific tariff provides domestic producers a greater amount of protection against import-competing goods.

Bonded warehouses and foreign trade zones have the effect of allowing domestic importers to postpone and prorate over time their import duty obligations.

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

Balance-of-payments Adjustments

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