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  9.3   Other Instruments of Trade Policy   1) An important difference between

Question :   9.3   Other Instruments of Trade Policy   1) An important difference between : 1925446

 

9.3   Other Instruments of Trade Policy

 

1) An important difference between tariffs and quotas is that tariffs

A) raise the price of the good.

B) generate tax revenue for the government.

C) stimulate international trade.

D) help domestic producers.

E) are paid by foreign producers.

2) Throughout the post-World War II era, the importance of tariffs as a trade barrier has

A) increased.

B) decreased.

C) remained the same.

D) fluctuated wildly.

E) demonstrated a classic random walk with a mean-reversion tendency.

3) In the exporting country, an export subsidy will

A) help consumers and raise the overall economic welfare of the exporting country.

B) hurt consumers but raise the overall economic welfare of the exporting country.

C) hurt consumers and lower the overall economic welfare of the exporting country.

D) help consumers but lower economic welfare of the exporting country.

E) help consumers and have no effect on the economic welfare of the exporting country.

4) 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 valorum tariff; and that for any quota one can calculate a tariff equivalent. Discuss conditions or situations under which a specific and an ad valorum tariff are not equivalent. Discuss conditions or situations when a tariff and a quota are not equivalent.

9.4   The Effects of Trade Policy: A Summary

 

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

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

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

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

3) An import quota will ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

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

4) A voluntary export restraint will ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

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

9.5   Appendix to Chapter 9: Tariffs and Import Quotas in the Presence of Monopoly

 

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

A) increase; have no effect on; decrease; increase; decrease

B) decrease; decrease; increase; decrease; have no effect on

C) increase; have no effect on; decrease; increase; decrease

D) decrease; increase; decrease; increase; decrease

E) have no effect on; have no effect on; decrease; increase; decrease

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

A) increase; increase; decrease; have no effect on; decrease

B) decrease; decrease; increase; decrease; have no effect on

C) increase; have no effect on; decrease; increase; decrease

D) decrease; increase; decrease; increase; decrease

E) have no effect on; have no effect on; decrease; increase; decrease

3) Suppose an import-competing firm is imperfectly competitive. Replacement of an export tariff with an import quota that yields the same level of imports will ________ market price, ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

A) increase; increase; decrease; decrease; decrease

B) have no effect on; have no effect on; have no effect on; decrease; decrease

C) increase; have no effect on; decrease; decrease; increase

D) increase; increase; increase; decrease; have an ambiguous effect on

E) decrease; decrease; increase; decrease; increase

4) 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.

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

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