Question 1

If politicians decide to proceed with protection,why might economists prefer tariffs to quotas? Explain at least three reasons.

Accepted Answer

I would expect my students to address th...

Question 2

Scenario 6.1
Suppose that United States furniture makers import $100 of wood and parts in order to make a dining room table selling for $500.The imports have no tariff of quota restrictions.
-Based on Scenario 6.1 above,value added in the United States is

Accepted Answer

A)  $500.
B)  $600.
C)  $400.
D)  $300.
E)  None of the above.F) A) and E)
G) All of the above

Question 3

Internationally,the TRIPS agreement is uniformly regarded as a positive step for world prosperity.

Accepted Answer

A) True 
 B)False

Question 4

The production side efficiency loss of a tariff is caused by

Accepted Answer

A)  confusion about prices when a tariff is imposed.
B)  higher profits gained by foreign producers.
C)  the expansion of relative inefficient domestic production.
D)  the contraction of domestic consumption.
E)  the increase in government revenue.F) B) and D)
G) A) and E)

Question 5

In economic terms,tariffs are preferred to quotas because

Accepted Answer

A)  domestic manufacturers gain more producer surplus.
B)  there is less loss of consumer surplus.
C)  tariffs are easier to administer.
D)  quotas create a greater production inefficiency.
E)  given the way quotas are usually administered,tariffs cause a smaller net national welfare loss.F) C) and E)
G) B) and D) E

Question 6

Figure 6.1
Use the graph below and the following information to answer the next question(s) .The world price of soybeans is $2.00 per bushel,and the importing country is small enough not to affect the world price.
 
-Based on Figure 6.1,how much revenue will the government raise from a $0.25 per bushel tariff on soybean imports?

Accepted Answer

A)  The government will raise $2.5 million.
B)  The government will raise $5 million.
C)  The government will raise $15 million.
D)  The government will raise $32.5 million.
E)  The government will see no increase in income;because the country is small,foreign firms will simply not serve it after the tariff is imposed.F) B) and C)
G) C) and D)

Question 7

Average tariff rates are highest for

Accepted Answer

A)  high-income countries.
B)  middle-income countries.
C)  low-income countries.
D)  industrialized countries.E) B) and D)
F) B) and C)

Question 8

Nominal rates of protection

Accepted Answer

A)  are always greater than effective rates of protection.
B)  are always smaller than effective rates of protection.
C)  refer to the tariffs placed on intermediate goods used to make the final good or service.
D)  cannot be negative.E) A) and D)
F) B) and D)

Question 9

What are some of the long-run costs of tariffs?

Accepted Answer

Increased rent seeki...

Question 10

Which of the following is FALSE?

Accepted Answer

A)  At the end of the twentieth century,more and more traded goods and services incorporated specialized knowledge and unique ideas.
B)  Pharmaceuticals,computer hardware,telecommunications equipment,and other high technology products are valuable because of the innovation and research they incorporate.
C)  Software,movies,music,and other artistic expressions are valued for their creativity.
D)  Developing countries usually strongly advocate the protection of intellectual property rights.
E)  The protection given to creators and innovators varied greatly internationally until standardization began with the signing of the TRIPs agreement.F) A) and E)
G) B) and C)

Question 11

High tariffs on intermediate inputs

Accepted Answer

A)  increase the effective rate of protection on final goods.
B)  have no impact on the effective rate of protection on final goods.
C)  decrease the effective rate of protection on final goods.
D)  lower the nominal rate of protection on final goods.
E)  raise the nominal rate of protection on final goods.F) A) and E)
G) B) and C) C

Question 12

Consumer surplus is equal to the area

Accepted Answer

A)  under the demand curve and above the supply curve.
B)  above the supply curve and below the price line.
C)  under the demand curve.
D)  under the supply curve.
E)  under the demand curve and above the price line.F) B) and D)
G) A) and E)

Question 13

What do developing countries want regarding agriculture in the Doha Round?

Accepted Answer

To limit government practices that block their access to markets or that subsidize production in high income countries

Question 14

Large countries can improve their welfare by levying a tariff only if it does not

Accepted Answer

A)  encourage rent seeking elsewhere in the economy.
B)  discourage innovation.
C)  lead to retaliation by the nation's trading partners.
D)  All of the above.
E)  None of the above.F) B) and C)
G) B) and D)

Question 15

Tariff revenue is an important source of operating revenue for many governments of high income countries.

Accepted Answer

A) True 
 B)False

Question 16

If the effective rate of protection is greater than the nominal rate of protection,there must be tariffs on intermediate products.

Accepted Answer

A) True 
 B)False

Question 17

Nontariff measures are generally much more difficult to eliminate than tariffs and quotas because they are embedded more deeply in national economic policies.

Accepted Answer

A) True 
 B)False

Question 18

What are the three major types of quotas?

Accepted Answer

Formal quotas outrig...

Question 19

Since the mid-1980s tariff rates in most nations have risen.

Accepted Answer

A) True 
 B)False

Question 20

The new GATS and TRIPS are separate agreements negotiated within the WTO framework as part of the Uruguay Round that apply to

Accepted Answer

A)  services and aircraft.
B)  services and transportation.
C)  agriculture and textiles.
D)  services and intellectual property.
E)  textiles and transportation.F) C) and E)
G) C) and D)

Exam 6: The Theory of Tariffs and Quotas

If politicians decide to proceed with protection,why might economists prefer tariffs to quotas? Explain at least three reasons.

Correct Answer
verified
I would expect my students to address th...
View Answer

Scenario 6.1 Suppose that United States furniture makers import $100 of wood and parts in order to make a dining room table selling for $500.The imports have no tariff of quota restrictions. -Based on Scenario 6.1 above,value added in the United States is

Correct Answer
verified

Internationally,the TRIPS agreement is uniformly regarded as a positive step for world prosperity.

Correct Answer
verified

The production side efficiency loss of a tariff is caused by

Correct Answer
verified

In economic terms,tariffs are preferred to quotas because

Correct Answer
verified
E

Correct Answer
verified

Average tariff rates are highest for

Correct Answer
verified

Nominal rates of protection

Correct Answer
verified

What are some of the long-run costs of tariffs?

Correct Answer
verified
Increased rent seeki...
View Answer

Which of the following is FALSE?

Correct Answer
verified

High tariffs on intermediate inputs

Correct Answer
verified
C

Consumer surplus is equal to the area

Correct Answer
verified

What do developing countries want regarding agriculture in the Doha Round?

Correct Answer
verified
To limit government practices that block their access to markets or that subsidize production in high income countries

Large countries can improve their welfare by levying a tariff only if it does not

Correct Answer
verified

Tariff revenue is an important source of operating revenue for many governments of high income countries.

Correct Answer
verified

If the effective rate of protection is greater than the nominal rate of protection,there must be tariffs on intermediate products.

Correct Answer
verified

Nontariff measures are generally much more difficult to eliminate than tariffs and quotas because they are embedded more deeply in national economic policies.

Correct Answer
verified

What are the three major types of quotas?

Correct Answer
verified
Formal quotas outrig...
View Answer

Since the mid-1980s tariff rates in most nations have risen.

Correct Answer
verified

The new GATS and TRIPS are separate agreements negotiated within the WTO framework as part of the Uruguay Round that apply to

Correct Answer
verified

Exam 6: The Theory of Tariffs and Quotas

If politicians decide to proceed with protection,why might economists prefer tariffs to quotas? Explain at least three reasons.

Correct AnswerverifiedI would expect my students to address th...View AnswerShow Answer

Scenario 6.1 Suppose that United States furniture makers import $100 of wood and parts in order to make a dining room table selling for $500.The imports have no tariff of quota restrictions. -Based on Scenario 6.1 above,value added in the United States is

Correct AnswerverifiedShow Answer

Internationally,the TRIPS agreement is uniformly regarded as a positive step for world prosperity.

Correct AnswerverifiedShow Answer

The production side efficiency loss of a tariff is caused by

Correct AnswerverifiedShow Answer

In economic terms,tariffs are preferred to quotas because

Correct AnswerverifiedE

Correct AnswerverifiedShow Answer

Average tariff rates are highest for

Correct AnswerverifiedShow Answer

Nominal rates of protection

Correct AnswerverifiedShow Answer

What are some of the long-run costs of tariffs?

Correct AnswerverifiedIncreased rent seeki...View AnswerShow Answer

Which of the following is FALSE?

Correct AnswerverifiedShow Answer

High tariffs on intermediate inputs

Correct AnswerverifiedC

Consumer surplus is equal to the area

Correct AnswerverifiedShow Answer

What do developing countries want regarding agriculture in the Doha Round?

Correct AnswerverifiedTo limit government practices that block their access to markets or that subsidize production in high income countries

Large countries can improve their welfare by levying a tariff only if it does not

Correct AnswerverifiedShow Answer

Tariff revenue is an important source of operating revenue for many governments of high income countries.

Correct AnswerverifiedShow Answer

If the effective rate of protection is greater than the nominal rate of protection,there must be tariffs on intermediate products.

Correct AnswerverifiedShow Answer

Nontariff measures are generally much more difficult to eliminate than tariffs and quotas because they are embedded more deeply in national economic policies.

Correct AnswerverifiedShow Answer

What are the three major types of quotas?

Correct AnswerverifiedFormal quotas outrig...View AnswerShow Answer

Since the mid-1980s tariff rates in most nations have risen.

Correct AnswerverifiedShow Answer

The new GATS and TRIPS are separate agreements negotiated within the WTO framework as part of the Uruguay Round that apply to

Correct AnswerverifiedShow Answer

Correct Answer
verified
I would expect my students to address th...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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E

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Increased rent seeki...
View Answer

Correct Answer
verified

Correct Answer
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C

Correct Answer
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Correct Answer
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To limit government practices that block their access to markets or that subsidize production in high income countries

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Formal quotas outrig...
View Answer

Correct Answer
verified

Correct Answer
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