Exam 5: Nontariff Trade Barriers

Which of the following refers to a market-sharing pact negotiated by trading partners to moderate the intensity of international competition?

The distribution of an import quota's revenue effect depends on the relative concentration of bargaining power between foreign exporters and domestic importers.

What is an OMA?

A subsidy granted to import-competing producers results in a welfare loss to the economy by an amount equal to the protective effect plus the consumption effect.

When increases in nonrestraint supply offset part of the cutback in shipments that occur under an export quota,the overall inefficiency loss for the importing country is less than that which would have occurred in the absence of nonrestrained exports.

A producer successfully practicing international dumping would charge:

What are the intent and impact of domestic content requirements?

For an export quota applied to manufactured goods,foreign exporters tend to capture only a negligible share of the quota's revenue effect.

Local content laws are consistent with the principle of import substitution,in which domestic production replaces the importation of goods from abroad.

Figure 5.3 illustrates the apple market for Sweden, assumed to be a "small" country that is unable to affect the world price. SSw?d?n is the domestic supply and DSw?d?n is the domestic demand. SSw?d?n?Q??t? is Sweden's supply schedule with an import quota. Figure 5.3. Sweden's Apple Market -Consider Figure 5.3.Assume that Swedish import companies behave as a monopoly buyer while foreign export companies behave as competitive sellers.Compared to free trade,Sweden's import quota results in domestic welfare:

From the perspective of the American public as a whole,export subsidies levied by overseas governments on goods sold to the United States:

Figure 5.2 illustrates the revenue and cost conditions of ABC Inc. which sells calculators in Canada and France. Figure 5.2. International Dumping -Consider Figure 5.2.Compared with the total revenue and total profit that ABC Inc.realizes in the absence of dumping,with dumping the firm attains a:

Suppose the United States and Japan enter into a voluntary export agreement in which Japan imposes an export quota on its automakers.The largest share of the export quota's "revenue effect" would tend to be captured by:

To the extent that a local content requirement forces firms to locate production in a high-cost nation,product price rises and consumer surplus falls.

Because export subsidies tend to result in domestic exporters charging lower prices on their goods sold overseas,the home country's:

If the Japanese demand for computers is elastic and the Canadian demand for computers is inelastic,a profit-maximizing firm would charge a higher price to Canadian buyers than to Japanese buyers.

Sporadic (distress)dumping would occur if domestic orange producers dispose of an excess quantity of oranges,resulting from an abnormally large harvest,by selling them at lower prices abroad than at home.

During the 1980s,U.S.steel-using companies (Caterpillar)actively supported the U.S.government's negotiation of voluntary export agreements with foreign steel-exporting countries.

-Consider Figure 5.1.Suppose the Mexican government provides a subsidy of $200 per ton to its steel producers,as indicated by the supply schedule SM ?w?th s?bs?d??. The total cost of the subsidy to the Mexican government equals:

Which trade restriction stipulates the percentage of a product's total value that must be produced domestically in order for that product to be sold domestically?