Question 1

Why does the WTO consider food aid to poor nations to be an "indirect subsidy"?

Accepted Answer

A)   It always has to be brokered by a third party.
B)   Poor nations have to pay for it in other ways.
C)   It enables firms to increase exports, partially paid for by the government.
D)   It only works with small farmers rather than large agribusiness.

Question 2

The main purpose of an export tariff is to:

Accepted Answer

A)   raise revenue for the government.
B)   protect domestic producers competing with the exporter.
C)   increase profits of exporters.
D)   decrease profits of exporters.

Question 3

For a small nation employing a production subsidy, domestic producers get a payment for every good produced, and domestic consumers:

Accepted Answer

A)   purchase the product at the world price the same as before the subsidy.
B)   pay a higher price for the product.
C)   pay a reduced price for the product.
D)   purchase more of the product.

Question 4

WTO negotiations in 2005 covered agricultural subsidies. What progress was made at these meetings in Hong Kong?

Accepted Answer

A)   Higher-income nations pushed for an end to agricultural subsidies, but did not get them.
B)   Goals were set to abolish agricultural subsidies by the end of 2013, but no actual changes occurred.
C)   The Hong Kong meetings were disrupted by protesters and had to be called off.
D)   The WTO members agreed to immediately eliminate agricultural subsidies in all countries.

Question 5

Suppose that the world price of sugar is $100 per ton. If a large country gives its sugar exporters a subsidy of $50 per ton, then domestic consumption of sugar will:

Accepted Answer

A)   fall.
B)   rise.
C)   remain unchanged.
D)   first fall, then rise.

Question 6

(Scenario: Freedonian Exports)  In the small country of Freedonia, the domestic demand for widgets is represented by P = 100 - 3Q; the domestic supply of widgets is represented by P = 1Q. Now suppose that Freedonia engages in international trade in widgets. The world price is $40. How many widgets will be consumed domestically and how many will be exported?

Accepted Answer

A)   It will consume 20 domestically and export 20.
B)   It will consume 20 domestically and export 40.
C)   It will consume 40 domestically and export 20.
D)   It will consume zero domestically and export 20.

Question 7

(Scenario: Freedonian Exports)  In the small country of Freedonia, the domestic demand for widgets is represented by P = 100 - 3Q; the domestic supply of widgets is represented by P = 1Q. Is the subsidy paid to Freedonia's widget exporters considered part of the deadweight losses of the subsidy?

Accepted Answer

A)   Yes: they are a payment to Freedonian exporters.
B)   Yes: they are paid by Freedonian exporters that supply the domestic market.
C)   No; they are a redistribution of income within the Freedonian economy.
D)   No; consumers of Freedonian widget exports pay the subsidies.

Question 8

Suppose that the world price of sugar is $100 per ton. If a small country gives its sugar exporters a subsidy of $50 per ton, then domestic consumption of sugar will:

Accepted Answer

A)   fall.
B)   rise.
C)   remain unchanged.
D)   first fall, then rise.

Question 9

Is an export subsidy a good way for a large nation to help a poor nation by exporting products to them at lower prices?

Accepted Answer

A)   Yes, and it is a method recommended by the WTO.
B)   It can help in some cases.
C)   No; it creates inefficiency in production and it hurts firms (especially small farmers)  in importing countries who cannot compete with subsidized imports.
D)   Yes; but it can get tricky when the importers demand even more quantity at lower prices.

Question 10

Suppose that the world price of sugar is $100 per ton. If a small country gives its sugar exporters a subsidy of $50 per ton, then its domestic price of sugar will:

Accepted Answer

A)   fall by $50 per ton.
B)   rise by $50 per ton.
C)   remain unchanged at $100 per ton.
D)   first fall to $50 per ton, then rise to $100 per ton.

Question 11

(Figure: Home's Exporting Industry I)  The graph shows information about a small home exporter. D is home demand and S is home supply.  According to the graph, at the world price of $125 there is a ________ of ____ in the home market, which is ____.

Accepted Answer

A)   surplus; 60; imported
B)   shortage; 60; imported
C)   surplus; 60; exported
D)   shortage; 100; exported

Question 12

Developing countries are divided over "special safeguards" for agricultural products. What are safeguards and why are they contentious?

Accepted Answer

Safeguards in the context of internation...

Question 13

In Europe, the Common Agricultural Policy:

Accepted Answer

A)   taxed European agricultural products sold in Europe.
B)   allowed European farmers to sell their output at above world prices in the European market.
C)   subsidized agricultural products, allowing European farmers to sell output at a price much higher than the world market price.
D)   subsidized agricultural products, allowing European farmers to sell output at a price much lower than the world market price.

Question 14

Economists use game theory to analyze:

Accepted Answer

A)   different exclusive options whose payoffs depend on the choices and actions of another entity with the same goals.
B)   how people behave with a limited set of options.
C)   economic decisions by consumers when income rises.
D)   the tax consequences of various investment decisions.

Question 15

Europe's subsidy for the _______ may have been a profitable strategic move because Boeing had not planned to produce that type of aircraft.

Accepted Answer

A)   Bell helicopter
B)   Blackhawk jet
C)   Lear jet
D)   double-decker Airbus 380

Question 16

What will happen to domestic and world prices when a large country imposes an export tariff?

Accepted Answer

A)   The world price will increase and the domestic price will decrease.
B)   Both the world price and the domestic price will increase
C)   The world price will decrease and the domestic price will increase.
D)   Both the domestic price and world price will decrease.

Question 17

(Figure: Payoff Matrix for Airbus and Boeing)  One could use game theory to analyze government subsidies. Using the payoff matrix below, what will each nation do if it is a 50-50 guess what the other side will do?

Accepted Answer

A)   Europe will subsidize Airbus and the United States will subsidize Boeing.
B)   Europe will not subsidize Airbus and the United States will not subsidize Boeing.
C)   Europe will subsidize Airbus and the United States will not subsidize Boeing.
D)   Europe will not subsidize Airbus and the United States will subsidize Boeing.

Question 18

How does a production subsidy differ from an export subsidy?

Accepted Answer

A)   It is applied only to production sold within the nation.
B)   It is applied to all production and imports-everything consumed in the nation.
C)   It is a payment from government to all domestic production-not only to units exported.
D)   It kicks in when the export subsidy runs out.

Question 19

What was agreed during the 2015 Nairobi negotiations on agricultural export subsidies?

Accepted Answer

During the 2015 Nairobi negotiations, wh...

Question 20

What is the difference between an agricultural export subsidy and an agricultural production subsidy?

Accepted Answer

A)   There is no difference between an agricultural export subsidy and an agricultural production subsidy.
B)   An agricultural export subsidy applies only to exports, whereas an agricultural production subsidy applies to domestic production sold at home and in the export market.
C)   An agricultural export subsidy applies only to production sold in the home market, whereas an agricultural production subsidy applies to production sold in the export market.
D)   Both agricultural export subsidies and production subsidies apply to production sold in the home market and in the export market.

Exam 10: Export Subsidies in Agriculture and High-Technology Industries

Europe's subsidy for the _______ may have been a profitable strategic move because Boeing had not planned to produce that type of aircraft.

Correct Answer
verified

Is an export subsidy a good way for a large nation to help a poor nation by exporting products to them at lower prices?

Correct Answer
verified

Suppose that the world price of sugar is $100 per ton. If a small country gives its sugar exporters a subsidy of $50 per ton, then domestic consumption of sugar will:

Correct Answer
verified

Suppose that the world price of sugar is $100 per ton. If a large country gives its sugar exporters a subsidy of $50 per ton, then domestic consumption of sugar will:

Correct Answer
verified

What will happen to domestic and world prices when a large country imposes an export tariff?

Correct Answer
verified

(Figure: Home's Exporting Industry I) The graph shows information about a small home exporter. D is home demand and S is home supply. According to the graph, at the world price of $125 there is a ____ of in the home market, which is .

Correct Answer
verified

Developing countries are divided over "special safeguards" for agricultural products. What are safeguards and why are they contentious?

Correct Answer
Answered by ExamLex AI
Safeguards in the context of internation...
View Answer

Why does the WTO consider food aid to poor nations to be an "indirect subsidy"?

Correct Answer
verified

For a small nation employing a production subsidy, domestic producers get a payment for every good produced, and domestic consumers:

Correct Answer
verified

What was agreed during the 2015 Nairobi negotiations on agricultural export subsidies?

Correct Answer
Answered by ExamLex AI
During the 2015 Nairobi negotiations, wh...
View Answer

In Europe, the Common Agricultural Policy:

Correct Answer
verified

Economists use game theory to analyze:

Correct Answer
verified

The main purpose of an export tariff is to:

Correct Answer
verified

(Scenario: Freedonian Exports) In the small country of Freedonia, the domestic demand for widgets is represented by P = 100 - 3Q; the domestic supply of widgets is represented by P = 1Q. Is the subsidy paid to Freedonia's widget exporters considered part of the deadweight losses of the subsidy?

Correct Answer
verified

Suppose that the world price of sugar is $100 per ton. If a small country gives its sugar exporters a subsidy of $50 per ton, then its domestic price of sugar will:

Correct Answer
verified

Correct Answer
verified

What is the difference between an agricultural export subsidy and an agricultural production subsidy?

Correct Answer
verified

(Figure: Payoff Matrix for Airbus and Boeing) One could use game theory to analyze government subsidies. Using the payoff matrix below, what will each nation do if it is a 50-50 guess what the other side will do?

Correct Answer
verified

WTO negotiations in 2005 covered agricultural subsidies. What progress was made at these meetings in Hong Kong?

Correct Answer
verified

How does a production subsidy differ from an export subsidy?

Correct Answer
verified

Exam 10: Export Subsidies in Agriculture and High-Technology Industries

Europe's subsidy for the _______ may have been a profitable strategic move because Boeing had not planned to produce that type of aircraft.

Correct AnswerverifiedShow Answer

Is an export subsidy a good way for a large nation to help a poor nation by exporting products to them at lower prices?

Correct AnswerverifiedShow Answer

Suppose that the world price of sugar is $100 per ton. If a small country gives its sugar exporters a subsidy of $50 per ton, then domestic consumption of sugar will:

Correct AnswerverifiedShow Answer

Suppose that the world price of sugar is $100 per ton. If a large country gives its sugar exporters a subsidy of $50 per ton, then domestic consumption of sugar will:

Correct AnswerverifiedShow Answer

What will happen to domestic and world prices when a large country imposes an export tariff?

Correct AnswerverifiedShow Answer

(Figure: Home's Exporting Industry I) The graph shows information about a small home exporter. D is home demand and S is home supply. According to the graph, at the world price of $125 there is a ________ of ____ in the home market, which is ____.

Correct AnswerverifiedShow Answer

Developing countries are divided over "special safeguards" for agricultural products. What are safeguards and why are they contentious?

Correct AnswerAnswered by ExamLex AISafeguards in the context of internation...View AnswerShow Answer

Why does the WTO consider food aid to poor nations to be an "indirect subsidy"?

Correct AnswerverifiedShow Answer

For a small nation employing a production subsidy, domestic producers get a payment for every good produced, and domestic consumers:

Correct AnswerverifiedShow Answer

What was agreed during the 2015 Nairobi negotiations on agricultural export subsidies?

Correct AnswerAnswered by ExamLex AIDuring the 2015 Nairobi negotiations, wh...View AnswerShow Answer

In Europe, the Common Agricultural Policy:

Correct AnswerverifiedShow Answer

Economists use game theory to analyze:

Correct AnswerverifiedShow Answer

The main purpose of an export tariff is to:

Correct AnswerverifiedShow Answer

(Scenario: Freedonian Exports) In the small country of Freedonia, the domestic demand for widgets is represented by P = 100 - 3Q; the domestic supply of widgets is represented by P = 1Q. Is the subsidy paid to Freedonia's widget exporters considered part of the deadweight losses of the subsidy?

Correct AnswerverifiedShow Answer

Suppose that the world price of sugar is $100 per ton. If a small country gives its sugar exporters a subsidy of $50 per ton, then its domestic price of sugar will:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What is the difference between an agricultural export subsidy and an agricultural production subsidy?

Correct AnswerverifiedShow Answer

(Figure: Payoff Matrix for Airbus and Boeing) One could use game theory to analyze government subsidies. Using the payoff matrix below, what will each nation do if it is a 50-50 guess what the other side will do?

Correct AnswerverifiedShow Answer

WTO negotiations in 2005 covered agricultural subsidies. What progress was made at these meetings in Hong Kong?

Correct AnswerverifiedShow Answer

How does a production subsidy differ from an export subsidy?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

(Figure: Home's Exporting Industry I) The graph shows information about a small home exporter. D is home demand and S is home supply. According to the graph, at the world price of $125 there is a ____ of in the home market, which is .

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
Safeguards in the context of internation...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
During the 2015 Nairobi negotiations, wh...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified