Question 1

Of the many arguments in favor of tariffs, the one that has enjoyed significant economic justification has been the

Accepted Answer

A)   cheap foreign labor argument.
B)   infant industry argument.
C)   even playing field argument.
D)   balance of payments argument.
E)   domestic living standard argument.

Question 2

The deadweight loss of a tariff

Accepted Answer

A)   is a social loss because it promotes inefficient use of national resources.
B)   is a social loss because it reduces the revenue of the government.
C)   is not a social loss because it merely redistributes revenue from one sector to another.
D)   is not a social loss because it is paid for by rich corporations.
E)   is not a social loss because it aids domestic consumers.

Question 3

If an import-competing firm is the only domestic producer of a good, then a transition from autarky to free trade will ________ domestic price, ________ producer surplus, ________ consumer surplus, and ________ overall domestic national welfare.

Accepted Answer

A)   decrease; decrease; increase; increase
B)   increase; increase; increase; increase
C)   decrease; decrease; decrease; decrease
D)   increase; increase; decrease; decrease
E)   increase; increase; decrease; increase

Question 4

The fact that industrialized countries levy very low or no tariff on raw materials and semi processed goods

Accepted Answer

A)   helps developing countries export manufactured products.
B)   has no effect on developing country exports.
C)   hurts developing country efforts to export manufactured goods.
D)   hurts developing country efforts to export raw materials.
E)   does not affect industrialized countries' exports.

Question 5

The most vocal political pressure for tariffs is generally made by

Accepted Answer

A)   consumers lobbying for export tariffs.
B)   consumers lobbying for import tariffs.
C)   consumers lobbying for lower import tariffs.
D)   producers lobbying for export tariffs.
E)   producers lobbying for import tariffs.

Question 6

Economic theory in general, and trade theory in particular are replete with equivalencies. For example, it is argued that for any specific tariff one can find an equivalent ad valorem tariff; and that for any quota one can calculate a tariff equivalent. Discuss conditions or situations under which a specific and an ad valorem tariff are not equivalent. Discuss conditions or situations when a tariff and a quota are not equivalent.

Accepted Answer

E.g., during a period of price inflation...

Question 7

-Refer to above figure. In the absence of trade, what is the country's consumer surplus?

Accepted Answer

The answer of 
-Refer to above figure. In the absence...

Question 8

Which type of tariff is forbidden in the United States on Constitutional grounds?

Accepted Answer

A)   import tariff
B)   export tariff
C)   specific tariff
D)   prohibitive tariff
E)   import quota

Question 9

Which of the following are examples of goods that have been subject to voluntary export restraints?

Accepted Answer

A)   Japanese cars and Chinese solar panels
B)   Belgian chocolates and French wines
C)   French wines and cheeses
D)   Japanese sushi and German cars
E)   Taiwanese electronics and Canadian barley

Question 10

It is argued that a tariff may help promote employment in a single industry, but is not likely to help employment in general. Discuss.

Accepted Answer

A general tariff on all imports is equiv...

Question 11

The tariff levied in a "large country" (Home) , lowers the world price of the imported good. This causes

Accepted Answer

A)   foreign consumers to demand less of the good on which was levied a tariff.
B)   domestic demand for imports to decrease.
C)   domestic demand for imports to increase.
D)   foreign suppliers to produce less of the good on which was levied a tariff.
E)   no change in the foreign price of the good it imports.

Question 12

If an import-competing firm is imperfectly competitive, then under free trade an export tariff will ________ domestic market price, ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

Accepted Answer

A)   increase; have no effect on; decrease; increase; decrease
B)   decrease; decrease; increase; decrease; have no effect on
C)   increase; have no effect on; increase; decrease; increase
D)   decrease; increase; decrease; increase; decrease
E)   have no effect on; have no effect on; decrease; increase; decrease

Question 13

An export tariff will ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

Accepted Answer

A)   increase; decrease; increase; have an ambiguous effect on
B)   increase; decrease; decrease; decrease
C)   increase; decrease; have no effect on; have an ambiguous effect on
D)   increase; decrease; have no effect on; decrease
E)   increase; increase; decrease; have an ambiguous effect on

Question 14

The imposition of tariffs on imports results in deadweight (triangle)  losses. These are

Accepted Answer

A)   production and consumption distortion effects.
B)   redistribution effects.
C)   revenue effects
D)   efficiency effects.
E)   distortion of incentives.

Question 15

-Refer to above figure. In the absence of trade, how many Widgets does this country consume?

Accepted Answer

The answer of 
-Refer to above figure. In the absence...

Question 16

-Refer to above figure. Given a tariff of $3 per unit, what is the country's consumer surplus?

Accepted Answer

The answer of 
-Refer to above figure. Given a tariff...

Question 17

-Refer to above figure. What is the amount of efficiency loss resulting from imposition of the tariff?

Accepted Answer

The answer of 
-Refer to above figure. What is the...

Question 18

Some argue that tariffs always hurt the imposing country's economic welfare, and are typically designed to shift resources from one sector to another, protected or preferred one, within an economy. Find and discuss a counter example to this argument.

Accepted Answer

The optimum tariff i...

Question 19

The European Union's Common Agricultural Policy (CAP)  is, in effect

Accepted Answer

A)   a tariff imposed on agricultural exports.
B)   a tariff imposed on agricultural imports.
C)   a subsidy that reduces the cost of agricultural exports.
D)   a subsidy that increases the cost of agricultural exports.
E)   a quota that limits production of agricultural goods by EU nations.

Question 20

-Refer to above figure. What is the amount of government revenue resulting from imposition of the tariff?

Accepted Answer

The answer of 
-Refer to above figure. What is the...

Exam 9: The Instruments of Trade Policy

-Refer to above figure. What is the amount of government revenue resulting from imposition of the tariff?

Correct Answer
verified

The deadweight loss of a tariff

Correct Answer
verified

An export tariff will producer surplus, consumer surplus, government revenue, and overall domestic national welfare.

Correct Answer
verified

The tariff levied in a "large country" (Home) , lowers the world price of the imported good. This causes

Correct Answer
verified

Of the many arguments in favor of tariffs, the one that has enjoyed significant economic justification has been the

Correct Answer
verified

Which type of tariff is forbidden in the United States on Constitutional grounds?

Correct Answer
verified

-Refer to above figure. What is the amount of efficiency loss resulting from imposition of the tariff?

Correct Answer
verified

The most vocal political pressure for tariffs is generally made by

Correct Answer
verified

It is argued that a tariff may help promote employment in a single industry, but is not likely to help employment in general. Discuss.

Correct Answer
verified
A general tariff on all imports is equiv...
View Answer

The imposition of tariffs on imports results in deadweight (triangle) losses. These are

Correct Answer
verified

Which of the following are examples of goods that have been subject to voluntary export restraints?

Correct Answer
verified

Some argue that tariffs always hurt the imposing country's economic welfare, and are typically designed to shift resources from one sector to another, protected or preferred one, within an economy. Find and discuss a counter example to this argument.

Correct Answer
verified
The optimum tariff i...
View Answer

The European Union's Common Agricultural Policy (CAP) is, in effect

Correct Answer
verified

If an import-competing firm is imperfectly competitive, then under free trade an export tariff will domestic market price, producer surplus, consumer surplus, government revenue, and overall domestic national welfare.

Correct Answer
verified

The fact that industrialized countries levy very low or no tariff on raw materials and semi processed goods

Correct Answer
verified

-Refer to above figure. In the absence of trade, what is the country's consumer surplus?

Correct Answer
verified

-Refer to above figure. Given a tariff of $3 per unit, what is the country's consumer surplus?

Correct Answer
verified

-Refer to above figure. In the absence of trade, how many Widgets does this country consume?

Correct Answer
verified

Correct Answer
verified
E.g., during a period of price inflation...
View Answer

If an import-competing firm is the only domestic producer of a good, then a transition from autarky to free trade will domestic price, producer surplus, consumer surplus, and overall domestic national welfare.

Correct Answer
verified

Exam 9: The Instruments of Trade Policy

-Refer to above figure. What is the amount of government revenue resulting from imposition of the tariff?

Correct AnswerverifiedShow Answer

The deadweight loss of a tariff

Correct AnswerverifiedShow Answer

An export tariff will ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

Correct AnswerverifiedShow Answer

The tariff levied in a "large country" (Home) , lowers the world price of the imported good. This causes

Correct AnswerverifiedShow Answer

Of the many arguments in favor of tariffs, the one that has enjoyed significant economic justification has been the

Correct AnswerverifiedShow Answer

Which type of tariff is forbidden in the United States on Constitutional grounds?

Correct AnswerverifiedShow Answer

-Refer to above figure. What is the amount of efficiency loss resulting from imposition of the tariff?

Correct AnswerverifiedShow Answer

The most vocal political pressure for tariffs is generally made by

Correct AnswerverifiedShow Answer

It is argued that a tariff may help promote employment in a single industry, but is not likely to help employment in general. Discuss.

Correct AnswerverifiedA general tariff on all imports is equiv...View AnswerShow Answer

The imposition of tariffs on imports results in deadweight (triangle) losses. These are

Correct AnswerverifiedShow Answer

Which of the following are examples of goods that have been subject to voluntary export restraints?

Correct AnswerverifiedShow Answer

Some argue that tariffs always hurt the imposing country's economic welfare, and are typically designed to shift resources from one sector to another, protected or preferred one, within an economy. Find and discuss a counter example to this argument.

Correct AnswerverifiedThe optimum tariff i...View AnswerShow Answer

The European Union's Common Agricultural Policy (CAP) is, in effect

Correct AnswerverifiedShow Answer

If an import-competing firm is imperfectly competitive, then under free trade an export tariff will ________ domestic market price, ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

Correct AnswerverifiedShow Answer

The fact that industrialized countries levy very low or no tariff on raw materials and semi processed goods

Correct AnswerverifiedShow Answer

-Refer to above figure. In the absence of trade, what is the country's consumer surplus?

Correct AnswerverifiedShow Answer

-Refer to above figure. Given a tariff of $3 per unit, what is the country's consumer surplus?

Correct AnswerverifiedShow Answer

-Refer to above figure. In the absence of trade, how many Widgets does this country consume?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedE.g., during a period of price inflation...View AnswerShow Answer

If an import-competing firm is the only domestic producer of a good, then a transition from autarky to free trade will ________ domestic price, ________ producer surplus, ________ consumer surplus, and ________ overall domestic national welfare.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

An export tariff will producer surplus, consumer surplus, government revenue, and overall domestic national welfare.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A general tariff on all imports is equiv...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The optimum tariff i...
View Answer

Correct Answer
verified

If an import-competing firm is imperfectly competitive, then under free trade an export tariff will domestic market price, producer surplus, consumer surplus, government revenue, and overall domestic national welfare.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
E.g., during a period of price inflation...
View Answer

If an import-competing firm is the only domestic producer of a good, then a transition from autarky to free trade will domestic price, producer surplus, consumer surplus, and overall domestic national welfare.

Correct Answer
verified