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Efficiency losses are


A) deadweight losses caused by consumers being prevented by tariffs from buying products at the world price, products that they value more highly than that price.
B) the total loss in consumer surplus from a tariff.
C) the increase in producer surplus that is created by a tariff.
D) the deadweight loss that is created because domestic firms have to charge higher prices to produce units of output than foreign firms would have to charge.

E) A) and C)
F) B) and C)

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The graph above shows domestic supply and demand with trade.With trade,this country can purchase at the world price,Pw. Which of the following areas represents producer surplus with trade? A) Pw-A-0 B) Pw-B-Qd-0 C) P1-B-Pw D) P1-B-A-0 The graph above shows domestic supply and demand with trade.With trade,this country can purchase at the world price,Pw. Which of the following areas represents producer surplus with trade?


A) Pw-A-0
B) Pw-B-Qd-0
C) P1-B-Pw
D) P1-B-A-0

E) All of the above
F) A) and C)

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


A) reduce rent seeking elsewhere in the economy.
B) create a deadweight loss.
C) lead to retaliation by the nation's trading partners.
D) increase domestic production of the good.

E) A) and B)
F) A) and C)

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The production side efficiency loss of a tariff is caused by


A) higher profits gained by foreign producers.
B) the expansion of relative inefficient domestic production.
C) the contraction of domestic consumption.
D) the increase in government revenue.

E) All of the above
F) None of the above

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Which of the following would be a deadweight loss from a tariff?


A) The shift of consumer surplus to government
B) The increase in producer surplus
C) The decrease in consumer surplus
D) The decrease in consumer surplus due to a drop in consumption

E) A) and B)
F) B) and C)

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What are the three major types of quotas?

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Formal quotas outrig...

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Based on Figure 6.1,given a tariff of $0.25 per bushel on soybean imports,how much will domestic production increase?


A) Domestic firms will increase output by 10 million bushels.
B) Domestic firms will increase output by 20 million bushels.
C) Domestic firms will increase output by 70 million bushels.
D) Domestic firms' production will not be changed by the tariff.

E) A) and D)
F) None of the above

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Figure 6.1 Figure 6.1 -Based on Figure 6.1,suppose the government puts a tariff of $0.25 per bushel on soybean imports.How much will the tariff reduce imports? A) Imports will decrease by 10 million bushels. B) Imports will decrease by 20 million bushels. C) Imports will decrease by 60 million bushels. D) Imports will not change after the tariff. -Based on Figure 6.1,suppose the government puts a tariff of $0.25 per bushel on soybean imports.How much will the tariff reduce imports?


A) Imports will decrease by 10 million bushels.
B) Imports will decrease by 20 million bushels.
C) Imports will decrease by 60 million bushels.
D) Imports will not change after the tariff.

E) All of the above
F) B) and D)

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Producer surplus is equal to the area


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

E) C) and D)
F) None of the above

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Suppose a manufacturer of software develops a new computer program that sells for $50.The $50 cost includes $0.25 for the CD it is stored on,$5 for the labor of the company software programmers,and $1.75 for packaging materials and transportation costs.Value added by the software company is


A) $49.75.
B) $48.25.
C) $48.
D) $44.75.

E) B) and C)
F) A) and B)

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In the case of a small country,consumer surplus


A) decreases less with a tariff than with an equivalent quota.
B) decreases less with a quota than with an equivalent tariff.
C) decreases the same with tariffs and equivalent quotas.
D) increases more with quotas.

E) All of the above
F) None of the above

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High tariffs on intermediate inputs


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) All of the above
F) A) and C)

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Developing countries have identified which key issues as important to them in current trade talks?

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The costs and benefits to them of implem...

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Consumer surplus is equal to the area


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 demand curve and above the price line.

E) C) and D)
F) A) and D)

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

A) True
B) False

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Draw a graph showing the effects of imposing a tariff in the small country case.Describe the results,using the concepts of producer surplus,consumer surplus and deadweight loss.Specifically address the effects on consumers,producers,government revenue and overall national well-being,connecting those effects to areas of your graph.

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Students should crea...

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The graph above shows domestic supply and demand with trade.With trade,this country can purchase at the world price,Pw. Which of the following areas represents consumer surplus with trade? A) Pw-A-0 B) Pw-B-Qd-0 C) P1-B-Pw D) P1-B-A-0 The graph above shows domestic supply and demand with trade.With trade,this country can purchase at the world price,Pw. Which of the following areas represents consumer surplus with trade?


A) Pw-A-0
B) Pw-B-Qd-0
C) P1-B-Pw
D) P1-B-A-0

E) All of the above
F) A) and D)

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What is the name of the agreement related to intellectual property rights?

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TRIPS,or Trade-Relat...

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The graph above shows domestic supply and demand with trade in a SMALL country.With trade,this country can purchase at the world price,Pw. Suppose that this country imposes a $5 per unit tariff on this good.Which of the following will NOT occur? A) Government revenue will increase. B) Domestic consumers will be worse off. C) Domestic producers will be better off. D) The gains to the winners will exceed the losses to the losers from the tariff. The graph above shows domestic supply and demand with trade in a SMALL country.With trade,this country can purchase at the world price,Pw. Suppose that this country imposes a $5 per unit tariff on this good.Which of the following will NOT occur?


A) Government revenue will increase.
B) Domestic consumers will be worse off.
C) Domestic producers will be better off.
D) The gains to the winners will exceed the losses to the losers from the tariff.

E) B) and C)
F) C) and D)

Correct Answer

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In the case of a small country,producer surplus


A) increases more with a tariff than with an equivalent quota.
B) increases more with a quota than with an equivalent tariff.
C) is not changed by tariffs or quotas.
D) increases the same amount with tariffs and equivalent quotas.

E) C) and D)
F) B) and D)

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