Question 1

Which of the following is NOT an effect of an import quota imposed by a small nation?

Accepted Answer

A)   It raises producer prices.
B)   It generates revenue for the nation.
C)   It causes more production by domestic industries.
D)   It causes a reduction in imports of the product.E) All of the above
F) A) and D)

Question 2

Which of the following is an exception to the most favored nation principle?

Accepted Answer

A)   trade in petroleum
B)   trade with Japan
C)   tariff concessions negotiated within a free-trade area or a customs union
D)   trade in servicesE) All of the above
F) C) and D)

Question 3

The difference between the price consumers are willing to pay and the price that they actually pay is known as:

Accepted Answer

A)   price discrimination.
B)   government surplus.
C)   consumer surplus.
D)   producer surplus.E) A) and D)
F) All of the above

Question 4

(Figure: Home's Import-Competing Industry)  Based on the graph, which of the following statements is (are)  correct?

Accepted Answer

A)   This nation will not produce anything if the world price is greater than $100.
B)   This nation will import nothing if the world price is $50.
C)   This nation would import 1,700 units if the world price is $50.
D)   This nation will produce 800 units if the world price is $50.E) B) and C)
F) A) and B)

Question 5

Why did no U.S. tire producer support the 2009 U.S. tariff on tires imported from China?

Accepted Answer

In 2009, the United States imposed tarif...

Question 6

(Figure: The Import-Competing Industry)  What is the increase in producer surplus if the demand for the product increases and the new equilibrium price is 30 and quantity is 50?

Accepted Answer

A)   $525
B)   $475
C)   $255
D)   $325E) B) and C)
F) All of the above

Question 7

Which statement best describes the result of a small country imposing a quota on imported sugar?

Accepted Answer

A)   The domestic price of sugar will fall.
B)   Domestic sugar consumption will fall.
C)   Domestic sugar production will fall.
D)   Domestic sugar consumption will rise.E) A) and C)
F) A) and B)

Question 8

Which of the following is NOT an effect of an import tariff?

Accepted Answer

A)   It increases producer surplus by raising the market price and allowing more production.
B)   It raises government revenue.
C)   It reduces consumer surplus by raising the market price.
D)   It improves efficiency in the economy overall because it saves high-paying jobs.E) B) and D)
F) A) and D)

Question 9

In 2002 the United States relied on GATT's ________ to impose tariffs on imported steel.

Accepted Answer

A)   escape clause
B)   antidumping clause
C)   countervailing duty clause
D)   most favored nation clauseE) B) and C)
F) B) and D)

Question 10

Suppose that the free-trade price of a ton of steel is €500. (Note: € is the symbol for the euro, a common currency used in 19 European countries, including Finland.)  Finland, a small country, imposes a €60 per-ton specific tariff on imported steel. With the tariff, Finland produces 300,000 tons of steel and consumes 600,000 tons of steel. What is the purpose of this €60-per-ton tariff?

Accepted Answer

A)   Its purpose is to protect Finnish steel consumers from foreign competition.
B)   Its purpose is to protect Finnish steel producers and consumers from the World Trade Organization.
C)   Its purpose is to protect Finnish steel producers from foreign competition.
D)   Its purpose is to cause Finland to comply with provisions of the General Agreement on Tariffs and Trade.E) B) and C)
F) A) and C)

Question 11

Suppose that consumer demand is given by this equation: P = 10 - Q. What is the value of consumer surplus when P = 5?

Accepted Answer

A)   $5
B)   $12.50
C)   $25
D)   $50E) A) and B)
F) All of the above

Question 12

Suppose that the equations S = 2P and D = 6 - P represent a small country's home supply and home demand curves, and the free-trade world price is $1. If the government imposed a 50% tariff on imports, how much revenue would it collect as a result of the tariff? (Note: It is possible to consume partial units of this product, such as 2.5 units.)

Accepted Answer

A)   $1.50
B)   $2.75
C)   $0.50
D)   $0.75E) A) and C)
F) C) and D)

Question 13

(Figure: Consumer Surplus)  When the price of the product is $15, the consumer surplus is:

Accepted Answer

A)   $441.
B)   $256.
C)   $13.
D)   $15.E) B) and C)
F) A) and D)

Question 14

The following table gives the hypothetical supply and demand of television sets in Guatemala. Guatemala is a small country that is unable to affect world prices. The world price (free-trade price)  is $300 per TV set.  With free trade, how many TV sets will Guatemala import?

Accepted Answer

A)   1,800
B)   1,200
C)   800
D)   600E) None of the above
F) All of the above

Question 15

(Figure: Home's Import-Competing Industry)  What is this nation's "welfare" before trade? ADB B)  triangle AEC C)  quadrangle DEBC D)  triangle EFG" class="answers-bank-image d-inline" rel="preload" >

Accepted Answer

A)   triangle ADB
B)   triangle AEC
C)   quadrangle DEBC
D)   triangle EFGE) All of the above
F) C) and D)

Question 16

If S = 1P represents a country's home supply curve and D = 100 - 1P represents its home demand curve, then the equation representing its import demand curve is:

Accepted Answer

A)   100 - 2P.
B)   50 - 1P.
C)   100 - 1P.
D)   50 - 2P.E) C) and D)
F) B) and D)

Question 17

We can measure producer and consumer surplus by looking at a graph of supply and demand. Producer surplus is:

Accepted Answer

A)   the area above the supply curve but below the equilibrium price.
B)   the area below the demand curve but greater than the equilibrium price.
C)   the area below the demand curve all the way down to the quantity axis.
D)   the combined triangular area below the demand curve and above the supply curve.E) A) and D)
F) A) and C)

Question 18

When a tariff is imposed, there is always an additional loss. One loss occurs when consumers purchase fewer units of the good because prices have risen, so society loses the value of that consumption. This loss is the:

Accepted Answer

A)   consumption loss.
B)   efficiency transfer.
C)   production loss.
D)   X-factor.E) A) and C)
F) B) and D)

Question 19

An import quota is different from a voluntary export restraint because:

Accepted Answer

A)   the former is imposed by the exporting country and the latter by the home country.
B)   the former is imposed by the home country and the latter by the exporting country.
C)   the latter is specified by domestic importers.
D)   the former results in less gain for the country.E) A) and B)
F) A) and D)

Question 20

A free-trade area is defined as:

Accepted Answer

A)   a trading agreement that allows for free flow of resources.
B)   a trading agreement that binds member countries to have a uniform tariff on other countries.
C)   a trading agreement that lets countries rely on subsidies on domestic production.
D)   a trading agreement in which a group of countries voluntarily agree to remove trade barriers between themselves.E) C) and D)
F) A) and B)

Exam 8: Import Tariffs and Quotas Under Perfect Competition

Correct Answer
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Which of the following is NOT an effect of an import quota imposed by a small nation?

Correct Answer
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Which of the following is an exception to the most favored nation principle?

Correct Answer
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(Figure: Home's Import-Competing Industry) What is this nation's "welfare" before trade?

Correct Answer
verified

Which statement best describes the result of a small country imposing a quota on imported sugar?

Correct Answer
verified

An import quota is different from a voluntary export restraint because:

Correct Answer
verified

Suppose that consumer demand is given by this equation: P = 10 - Q. What is the value of consumer surplus when P = 5?

Correct Answer
verified

(Figure: Home's Import-Competing Industry) Based on the graph, which of the following statements is (are) correct?

Correct Answer
verified

In 2002 the United States relied on GATT's ________ to impose tariffs on imported steel.

Correct Answer
verified

The difference between the price consumers are willing to pay and the price that they actually pay is known as:

Correct Answer
verified

(Figure: Consumer Surplus) When the price of the product is $15, the consumer surplus is:

Correct Answer
verified

We can measure producer and consumer surplus by looking at a graph of supply and demand. Producer surplus is:

Correct Answer
verified

Why did no U.S. tire producer support the 2009 U.S. tariff on tires imported from China?

Correct Answer
Answered by ExamLex AI
In 2009, the United States imposed tarif...
View Answer

If S = 1P represents a country's home supply curve and D = 100 - 1P represents its home demand curve, then the equation representing its import demand curve is:

Correct Answer
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Correct Answer
verified

(Figure: The Import-Competing Industry) What is the increase in producer surplus if the demand for the product increases and the new equilibrium price is 30 and quantity is 50?

Correct Answer
verified

Which of the following is NOT an effect of an import tariff?

Correct Answer
verified

When a tariff is imposed, there is always an additional loss. One loss occurs when consumers purchase fewer units of the good because prices have risen, so society loses the value of that consumption. This loss is the:

Correct Answer
verified

The following table gives the hypothetical supply and demand of television sets in Guatemala. Guatemala is a small country that is unable to affect world prices. The world price (free-trade price) is $300 per TV set. With free trade, how many TV sets will Guatemala import?

Correct Answer
verified

A free-trade area is defined as:

Correct Answer
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Exam 8: Import Tariffs and Quotas Under Perfect Competition

Correct AnswerverifiedShow Answer

Which of the following is NOT an effect of an import quota imposed by a small nation?

Correct AnswerverifiedShow Answer

Which of the following is an exception to the most favored nation principle?

Correct AnswerverifiedShow Answer

(Figure: Home's Import-Competing Industry) What is this nation's "welfare" before trade?

Correct AnswerverifiedShow Answer

Which statement best describes the result of a small country imposing a quota on imported sugar?

Correct AnswerverifiedShow Answer

An import quota is different from a voluntary export restraint because:

Correct AnswerverifiedShow Answer

Suppose that consumer demand is given by this equation: P = 10 - Q. What is the value of consumer surplus when P = 5?

Correct AnswerverifiedShow Answer

(Figure: Home's Import-Competing Industry) Based on the graph, which of the following statements is (are) correct?

Correct AnswerverifiedShow Answer

In 2002 the United States relied on GATT's ________ to impose tariffs on imported steel.

Correct AnswerverifiedShow Answer

The difference between the price consumers are willing to pay and the price that they actually pay is known as:

Correct AnswerverifiedShow Answer

(Figure: Consumer Surplus) When the price of the product is $15, the consumer surplus is:

Correct AnswerverifiedShow Answer

We can measure producer and consumer surplus by looking at a graph of supply and demand. Producer surplus is:

Correct AnswerverifiedShow Answer

Why did no U.S. tire producer support the 2009 U.S. tariff on tires imported from China?

Correct AnswerAnswered by ExamLex AIIn 2009, the United States imposed tarif...View AnswerShow Answer

If S = 1P represents a country's home supply curve and D = 100 - 1P represents its home demand curve, then the equation representing its import demand curve is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

(Figure: The Import-Competing Industry) What is the increase in producer surplus if the demand for the product increases and the new equilibrium price is 30 and quantity is 50?

Correct AnswerverifiedShow Answer

Which of the following is NOT an effect of an import tariff?

Correct AnswerverifiedShow Answer

When a tariff is imposed, there is always an additional loss. One loss occurs when consumers purchase fewer units of the good because prices have risen, so society loses the value of that consumption. This loss is the:

Correct AnswerverifiedShow Answer

The following table gives the hypothetical supply and demand of television sets in Guatemala. Guatemala is a small country that is unable to affect world prices. The world price (free-trade price) is $300 per TV set. With free trade, how many TV sets will Guatemala import?

Correct AnswerverifiedShow Answer

A free-trade area is defined as:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
Answered by ExamLex AI
In 2009, the United States imposed tarif...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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