Question 1

Empirical studies show that because voluntary export quotas are typically administered by exporting countries,foreign exporters tend to:

Accepted Answer

A)  Raise their export prices,thus capturing much of the quota's revenue effect 
B)  Lower their export prices,thus losing much of the quota's revenue effect 
C)  Raise their export prices,thus selling more goods overseas 
D)  Lower their export prices,thus selling fewer goods overseas

Question 2

A specification of a maximum amount of a foreign produced good that will be allowed to enter the country over a given time period is referred to as:

Accepted Answer

A)  A domestic subsidy 
B)  An export subsidy 
C)  An import quota 
D)  An export quota

Question 3

Government subsidies may take the form of all of these EXCEPT:

Accepted Answer

A)  cash disbursements 
B)  tax breaks 
C)  bank credits 
D)  insurance arrangements

Question 4

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:

Accepted Answer

A)  The U.S.government 
B)  Japanese automakers 
C)  American auto consumers 
D)  American autoworkers

Question 5

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.With international dumping,ABC Inc.sells ____ calculators to Canadian buyers at a price of $____ and ____ calculators to French buyers at a price of $____.

Accepted Answer

A)  15,$4,12,$7 
B)  15,$7,12,$4 
C)  9,$5,15,$6 
D)  9,$6,15,$5

Question 6

Figure 5.4.Venezuelan Calculator Market 
-Consider Figure 5.4.Assume the Venezuelan government grants its manufacturers a production subsidy of $4 per calculator.After the subsidy is granted,Venezuelan imports total:

Accepted Answer

A)  8 calculators 
B)  12 calculators 
C)  16 calculators 
D)  20 calculators

Question 7

An import quota is a physical restriction on the quantity of goods that may be imported during a specified time period.

Accepted Answer

A) True 
 B)False

Question 8

Local content laws stipulate the maximum percentage of a product's total value that must be produced domestically for that product to be sold domestically.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Figure 5.1.Alternative Nontariff Trade Barriers Levied by a "Small" Country 
-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 (with subsidy). The quantity of imports equals:

Accepted Answer

A)  1 ton 
B)  2 tons 
C)  3 tons 
D)  4 tons

Question 11

An effective Buy American law results in deadweight welfare losses for the United States in the form of the protective effect and consumption effect.

Accepted Answer

A) True 
 B)False

Question 12

The United Auto Workers union attempted to win the approval of legislation that would moderate the practice of foreign sourcing on the part of American auto manufacturers.Which of the following best represents this legislation?

Accepted Answer

A)  Voluntary export quotas 
B)  Trigger price mechanism 
C)  Tariff quotas 
D)  Local content laws

Question 13

Consider Figure 5.5.With free trade,Mexican producer surplus equals $2450 and Mexican consumer surplus equals $200.

Accepted Answer

A) True 
 B)False

Question 14

Suppose the government grants a subsidy to its export firms that permits them to charge lower prices on goods sold abroad.The export revenue of these firms would rise if the foreign demand is:

Accepted Answer

A)  Elastic in response to the price reduction 
B)  Inelastic in response to the price reduction 
C)  Unit elastic in response to the price reduction 
D)  None of the above

Question 15

A subsidy granted to import-competing producers reduces overall domestic welfare by the same amount as would a tariff or quota that restricts imports by the same amount.

Accepted Answer

A) True 
 B)False

Question 16

If the home country's government grants a subsidy on a domestically produced good,domestic producers tend to:

Accepted Answer

A)  Capture the entire subsidy in the form of higher profits 
B)  Increase their level of production 
C)  Reduce wages paid to domestic workers 
D)  Consider the subsidy as an increase in production cost

Question 17

Figure 5.6 Domestice Supply and demand for Wine - US 
-Consider Figure 5.6.In the global market for wine,the EU is willing to supply as much wine as the US demands at $8 per bottle.IF the US imposes a quota of 15 bottles of wine,how much wine will US consumers demand,how much wine will US producers produce and how much wine will be imported?

Accepted Answer

A)  30 bottles,20 bottles,10 bottles 
B)  40 bottles,25 bottles,15 bottles 
C)  30 bottles,30 bottles,0 bottles 
D)  30 bottles,15 bottles,15 bottles

Question 18

What is the price-based definition of dumping?

Accepted Answer

The answer of What is the price-based definition of dumping?...

Question 19

Figure 5.1.Alternative Nontariff Trade Barriers Levied by a "Small" Country 
-Referring to Figure 5.1,suppose the Mexican government imposes an import quota equal to 2 tons of steel. If foreign exporters behave as monopoly sellers,and Mexican importers behave as competitive buyers,the overall welfare loss of the quota to Mexico equals:

Accepted Answer

A)  $200 
B)  $400 
C)  $600 
D)  $800

Question 20

Suppose the government grants a subsidy to domestic producers of an import-competing good.The subsidy tends to result in deadweight losses for the domestic economy in the form of the:

Accepted Answer

A)  Consumption effect 
B)  Redistribution effect 
C)  Revenue effect 
D)  Protective effect

Exam 5: Nontariff Trade Barriers

Empirical studies show that because voluntary export quotas are typically administered by exporting countries,foreign exporters tend to:

A specification of a maximum amount of a foreign produced good that will be allowed to enter the country over a given time period is referred to as:

Government subsidies may take the form of all of these EXCEPT:

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:

Figure 5.4.Venezuelan Calculator Market -Consider Figure 5.4.Assume the Venezuelan government grants its manufacturers a production subsidy of $4 per calculator.After the subsidy is granted,Venezuelan imports total:

An import quota is a physical restriction on the quantity of goods that may be imported during a specified time period.

Local content laws stipulate the maximum percentage of a product's total value that must be produced domestically for that product to be sold domestically.

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

Figure 5.1.Alternative Nontariff Trade Barriers Levied by a "Small" Country -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 S_{M (with subsidy)}. The quantity of imports equals:

An effective Buy American law results in deadweight welfare losses for the United States in the form of the protective effect and consumption effect.

The United Auto Workers union attempted to win the approval of legislation that would moderate the practice of foreign sourcing on the part of American auto manufacturers.Which of the following best represents this legislation?

Consider Figure 5.5.With free trade,Mexican producer surplus equals $2450 and Mexican consumer surplus equals $200.

Suppose the government grants a subsidy to its export firms that permits them to charge lower prices on goods sold abroad.The export revenue of these firms would rise if the foreign demand is:

A subsidy granted to import-competing producers reduces overall domestic welfare by the same amount as would a tariff or quota that restricts imports by the same amount.

If the home country's government grants a subsidy on a domestically produced good,domestic producers tend to:

What is the price-based definition of dumping?

Suppose the government grants a subsidy to domestic producers of an import-competing good.The subsidy tends to result in deadweight losses for the domestic economy in the form of the:

Exam 5: Nontariff Trade Barriers

Empirical studies show that because voluntary export quotas are typically administered by exporting countries,foreign exporters tend to:

A specification of a maximum amount of a foreign produced good that will be allowed to enter the country over a given time period is referred to as:

Government subsidies may take the form of all of these EXCEPT:

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:

Figure 5.4.Venezuelan Calculator Market -Consider Figure 5.4.Assume the Venezuelan government grants its manufacturers a production subsidy of $4 per calculator.After the subsidy is granted,Venezuelan imports total:

An import quota is a physical restriction on the quantity of goods that may be imported during a specified time period.

Local content laws stipulate the maximum percentage of a product's total value that must be produced domestically for that product to be sold domestically.

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

Figure 5.1.Alternative Nontariff Trade Barriers Levied by a "Small" Country -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 (with subsidy) . The quantity of imports equals:

An effective Buy American law results in deadweight welfare losses for the United States in the form of the protective effect and consumption effect.

The United Auto Workers union attempted to win the approval of legislation that would moderate the practice of foreign sourcing on the part of American auto manufacturers.Which of the following best represents this legislation?

Consider Figure 5.5.With free trade,Mexican producer surplus equals $2450 and Mexican consumer surplus equals $200.

Suppose the government grants a subsidy to its export firms that permits them to charge lower prices on goods sold abroad.The export revenue of these firms would rise if the foreign demand is:

A subsidy granted to import-competing producers reduces overall domestic welfare by the same amount as would a tariff or quota that restricts imports by the same amount.

If the home country's government grants a subsidy on a domestically produced good,domestic producers tend to:

What is the price-based definition of dumping?

Suppose the government grants a subsidy to domestic producers of an import-competing good.The subsidy tends to result in deadweight losses for the domestic economy in the form of the:

Figure 5.1.Alternative Nontariff Trade Barriers Levied by a "Small" Country -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 S_{M (with subsidy)}. The quantity of imports equals: