Exam 6: Trade Regulations and Industrial Policies

Assume that the United States is the only supplier of grain to China and that it levies a partial export embargo against China.The embargo leads to increased U.S.welfare if the resulting improvement in the U.S.terms of trade with China more than offset the costs of the lower export volume to China.

In U.S.trade law,Section 301 cases involve accusations of:

Which international organization stipulates procedures for the settlement of international trade disputes?

Export embargoes induce greater losses in consumer surplus for the target country:

The principle of normal trade relations (most-favored-nation)treatment was established with the passage of the:

Economic sanctions are most effective in causing the target nation to modify its behavior when the:

Under U.S.commercial policy,the escape clause results in:

Assume Boeing Inc. (of the United States) and Airbus Industrie (of Europe) rival for monopoly profits in the Canadian aircraft market. Suppose the two firms face identical cost and demand conditions, as seen in Figure 6.1. Figure 6.1. Strategic Trade Policy: Boeing versus Airbus -Consider Figure 6.1.At the monopoly price as established by Boeing,Canadian consumers realize $____ of consumer surplus from the availability of aircraft.

Concerning industrial policy,the United States has nationalized its major industries in an attempt to promote global champions.

Adjustment assistance is sometimes used to assist:

U.S.tariffs on imports from countries issued normal-trade-relations (most-favored-nation)status are often three or four times as high as those on comparable imports from nations not receiving that status.

Economic theory suggests that if France is a net importer of automobiles,whose production is subsidized by the Korean government,the overall welfare of France decreases because of the Korean subsidy.

In the post World War II era,the Japanese government formed industrial policies to encourage the development of its steel,auto,shipbuilding,and machine tool industries.

For the United States,which organization makes loans to foreign buyers of U.S.manufactured goods?

Assume Boeing Inc. (of the United States) and Airbus Industrie (of Europe) rival for monopoly profits in the Canadian aircraft market. Suppose the two firms face identical cost and demand conditions, as seen in Figure 6.1. Figure 6.1. Strategic Trade Policy: Boeing versus Airbus -Referring to Figure 6.1,assume that Boeing is the first to enter the Canadian market.Without a governmental subsidy,the firm maximizes profits by selling ____ aircraft at a price of $____,and realizes profits totaling $____.

Industrial policies of the U.S.government have included subsidizing particular firms to promote national champions,nationalizing basic industries,and encouraging cartelization of industries.

Trade theory suggests that the United States would gain from a subsidy provided by Japan to its calculator producers if the gains to American consumers of calculators more than offset the losses to American calculator producers.This occurs as long as the United States:

Assume that Russia has a comparative advantage in vodka.If the United States extends Russia the benefits of the normal-trade-relations (most favored nation)principle,U.S.consumer surplus decreases in the vodka market.

Copyrights,trademarks,and patents are used to protect the intellectual property of a nation from foreign imitators.

The only members of the General Agreement on Tariffs and Trade and its successor,the World Trade Organization,are developing countries rather than developed countries.