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Study Resources (Business Management)

(Figure: Home Market II) The foreign producers in the figure absorbed _____ of the overall tariff. •$10 •$8 •$5 •10% (Figure: Home Market II) The net welfare loss for the home country because of the tariff is: •$50. •$25. •$0. •$100. 123Suppose that the United States is a large country. In fall.
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141The GATT does not allow countries to form preferential trade agreements. True False 142Under terms of NAFTA (the North American Free Trade Agreement) Canada, the United States, and Mexico have adopted a common tariff structure. •True •False 143There is no need for rules of origin requirements in a customs union. •True •False.
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•where member countries are free to set their separate tariffs on other countries. •where members agree to set similar tariffs on nonmembers. •where resources are free to move between member countries. •where member countries have common currency. 42Which of the following regional trade agreements is a free-trade area? •NAFTA •the European.
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151One way to fairly distribute quotas, while getting revenue for the government, is to: •auction quotas in a public sale to the highest bidder. •conduct a lottery for quotas for the lucky winner. •allow Congress to apportion quotas among their constituents. •restrict quotas on the basis of handicap, gender, and.
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171Producers' surplus represents producers' monopoly profits. •True •False 172If the United States is a small country and imposes a tariff on imported T-shirts of 30% and the world price is $5 per T-shirt, then the value of T-shirts once they have cleared U.S. customs is $6.50. •True •False 173Economic welfare always.
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•Member countries can enter into exclusive favorable agreements with some countries. •Member countries are barred from forming agreements outside their geographic vicinity. •Member countries must extend the same low tariff to all WTO member countries. •Member countries can charge differential tariff on other countries. 12The WTO is considered a _________,.
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61Imports from Europe to the United States have risen. This suggests that: •the dollar has depreciated. •the euro has appreciated. •the dollar has appreciated. •the euro has depreciated. 62Exports from Australia to Brazil have increased. This suggests that the Australian dollar: •has appreciated against the Brazilian real. •has depreciated against.
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The supplied table gives the foreign elasticity of supply for several types of U.S. steel imports. Product Elasticity of Export Supply Alloy Steel 0.27 Steel bars and rods 0.80 Steel tubes and pipes 90 Steel flat-rolled products 750 (Table: Export Supply Elasticities) It is almost certain that the 2002 imposition of 13% to 15% tariffs on steel tubes and pipes resulted.
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81Because it is difficult to negotiate multilateral trade agreements, some economists argue that preferential trade agreements are always beneficial since they represent a movement toward freer trade, which is better than no movement at all. Is this argument always correct? •Yes, any movement toward freer trade is better than no.
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31The WTO (under the GATT agreement) provides that nations may enter into regional trade agreements as long as they: •limit such agreements to one. •extend the provisions to all other nations in the WTO. •do not jointly increase tariffs against outside countries. •make sure they include smaller nations in their.
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71 Table: Currency Values II Currency 2007 2008 $1 1.5 euros 1 euro $1 2 Brazilian reais 1.5 Brazilian reais $1 2 British pounds 3 British pounds $1 45 Indian rupees 50 Indian rupees (Table: Currency Values II) If there are no arbitrage possibilities, then the pound-real exchange rate in 2007 is: •2. •1. •5. •3. Currency 2001 2002 $1 1 euro .6 euro $1 3 Brazilian reais 2 Brazilian reais $1 .75 British pounds .5 British pounds $1 40.
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91At one time, most compact trucks (like the Toyota Tacoma) were imported under the classification “cab and chassis with some final assembly needed.” These were classified as ___________ with a tariff of ______ . •complete or unfinished trucks; 4% •complete or unfinished trucks; 25% •parts of trucks; 25% •parts of.
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Table: Currency Values II: How Much 1 U.S. Dollar Will Buy of Other Currencies in 2007 and 2008 Currency 2007 2008 $1 1.5 euros 1 euro $1 2 Brazilian reais 1.5 Brazilian reais $1 2 British pounds 3 British pounds $1 45 Indian rupees 50 Indian rupees (Table: Currency Values II) All else being equal, if you want to invest dollars in 2007 and then convert them.
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191A “safeguard” tariff is a temporary one that is set to prevent injury to a domestic firm. •True •False 192Infant industry protection lowers the average cost of domestic firms. •True •False 193An infant industry matures when it takes advantage of its increasing returns to scale. •True •False 194An infant industry.
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101An internationally discriminating monopolist is one that: •can charge different prices to each customer in its domestic market. •can charge different prices in its domestic and foreign markets. •faces a downward-sloping demand curve in its domestic market and a perfectly elastic demand curve in its foreign market. •faces a perfectly elastic.
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51When products from a high-cost country within a customs union replace imports from a low-cost country that is not a member of the union, this is called: •trade creation. •trade diversion. •trade deflection. •trade development. 52A customs union will increase the welfare of its members and the rest of the.
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51The WTO has encouraged nations to replace their import quotas with tariffs. Why? •Quotas are more difficult to administer for the customs people. •Quotas are more discriminatory. •Quotas hurt domestic firms more than tariffs.   •None of these answer choices are correct. 52For a home monopolist, a quota allows the firm.
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(Figure: U.S. Imports from Mexico and Asia) Suppose the United States imposes a tariff of $100; then the total imports will be: •600. •250.   •400.  •500.  (Figure: U.S. Imports from Mexico and Asia) With the $100 tariff, the United States will import ______ from Mexico and _______ from China. •400; 100.
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1During which round of negotiations did the WTO toughen its stance against domestic policies that limit trade? •Bretton Woods •Uruguay •Doha •The WTO never toughened its stance against domestic policies. 2Where was the Climate Summit held in December 2009? •Brussels •New York •Seattle •Copenhagen 3What was the result of the Climate.
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111The VER between the United States and Japan was shown to _______________ gas consumption, _______________ the use of energy, and _______________ gas mileage from automobiles. •raise; raise; lower •lower; lower; raise •raise; lower; lower •lower; raise; raise •trade inherently results in losses. •common property often results in an abuse of the property,.
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51The U.S. dollar's effective exchange rate since 2002 has steadily declined. However, that decline was not as steep against all major currencies as it was with the well-known major currencies because: •the U.S. government has a strong dollar policy.   •the large trading partners, China and Japan, did not allow their.
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111SCENARIO: DISCRIMINATING MONOPOLIST The demand curve in its home market is P = 200 – Q; the demand curve in its foreign market is P = 160 – 2Q; and its marginal cost is a constant $20 per unit. (Scenario: Discriminating Monopolist) What is the discriminating monopolist's profit in the foreign market? •$90.
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181An optimal tariff is an amount that leads to the maximum increase in welfare for the importing country. •True •False •True •False 183The optimal tariff increases as the foreign elasticity of supply increases. •True •False 184Analysis indicates that all U.S. tariffs on steel lowered U.S. welfare. •True •False 185Quota licenses are permits.
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61SCENARIO: ELECTRIC FAN TRADE U.S. firms can produce and sell electric fans for $25. The United States can also import electric fans from China at $40 each and from Canada at $45 each. Electric fans made in the United States, China, and Canada are identical. Currently, the United States imposes a.
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121Who will lose if the European Union imposes an antidumping duty on shoes imported from China? •European consumers and European shoe manufacturers •Chinese consumers and Chinese shoe manufacturers •Chinese consumers and European shoe manufacturers •European consumers and Chinese shoe manufacturers 122An antidumping duty equals the difference between: •the price charged by.
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(Figure: The Home Market) Under conditions of no-trade, the domestic monopolist will produce and sell _______ at a price of _________ . •18; $15 •28; $15 •12; $25 •12; $15 (Figure: The Home Market) If the world price is $15, the domestic monopolist will produce ______ and the country will import.
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Table: Currency Values I Currency 2007 2008 $1 1.5 euros 1 euro $1 2 Brazilian reais 1.5 Brazilian reais $1 2 British pounds 3 British pounds $1 45 Indian rupees 50 Indian rupees (Table: Currency Values I) The U.S. dollar appreciated against the _________. •Mexican peso and Japanese yen. •Mexican peso and Indian rupee. •euro and Japanese yen. •euro and the Indian rupee. 3Table: Currency Values I 2 Currency 2007 2008 $1 1.5.
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181It is possible that a country's net welfare can increase when it imposes a tariff on a foreign monopolist. •True •False 182One reason why Japan produces pickup trucks in the United States is the United States' 25% tariff on imported pickup trucks. •True •False 183Pass-through of tariffs for U.S. truck imports from.
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101Suppose that the U.S. government required firms to pay a living wage to workers in their subsidiaries or contracting firms in developing countries. As a consequence of this requirement, wages would likely _______ to the living wage and employment would likely _________ . •rise; increase •fall; increase •rise; decrease •fall; decrease.
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21In European terms, when the exchange rate for the U.S. dollar increases: •the dollar has appreciated. •the dollar has depreciated. •the euro has appreciated. •the dollar has weakened. 22Which of the following statements are equivalent to an appreciation of the dollar relative to the euro? •The dollar buys more euros.
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121Which of the following is not an example of a global pollutant? •chlorofluorocarbons (CFCs) •carbon monoxide •carbon dioxide •carbon dioxide and chlorofluorocarbons 122In the case of global pollution, a nation that pollutes gets benefit from production but: •has to pay for it in terms of dirty air and water. •never receives.
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71Roughly ________ of the increased prices of Japanese automobiles during the 1980s was due to the voluntary export restraints. •25% •35% •50% •95% 72Following the tariff on Japanese autos, other auto exporters to the United States __________ due to ___________ . •lost market share; the Japanese agreement   •enjoyed higher prices and.
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131A recent antidumping case charged Canadian tomato producers with dumping tomatoes on the U.S. market. In order for the United States to impose antidumping duties, Canadian tomatoes must be sold at _______ than their fair value in the United States, and there must be injury to the ________ tomato industry. •more;.
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131The United States has not signed on to the Kyoto Protocol for all the following reasons except which of the following? •We still do not understand all the consequences of policy actions. •Meeting the Kyoto targets would negatively affect the U.S. economy. •Kyoto failed to include the developing countries, especially.
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•a negative externality. •a positive externality. •a constant externality. •an externality. 152To make a correct decision about limiting imports on behalf of an infant industry, the government should look at: •political pressure from key constituents. •a cost-benefit analysis measuring the present value of the likely benefits from lower production costs.
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1Exchange rates affect: •international trade flows. •international investment flows. •corporate earnings. •All of the above are affected. 2The price of a foreign currency expressed in terms of the home currency is called: •the exchange rate. •the rate of depreciation. •the dollar/yen ratio. •the opportunity cost. •the number of units of the.
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141SCENARIO: FINNISH STEEL 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 16 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.
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91Although it has had some criticism for ineffectiveness, in what way has the North American Agreement on Labor Cooperation had some positive benefits? •by creating an institutional forum for the discussion of labor issues in Canada, the United States, and Mexico   •by allowing nations to reveal in a public way violations.
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171The tariff and free-trade equilibria are the same for a domestic monopoly and equivalent perfectly competitive industry. •True •False 172The deadweight losses from a tariff are higher for a domestic monopoly than an equivalent perfectly competitive industry. •True •False 173The deadweight loss from a tariff is always higher when the.
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(Figure: The Home Monopolist's Market) The graph shows a home monopolist market with the imposition of a tariff. According to the graph, the consumer surplus under free trade is: •$150,000. •$157,250. •$78,625. •$850. (Figure: The Home Monopolist's Market) The graph shows a home monopolist market with the imposition of a tariff..
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1A foreign discriminating monopolist is engaging in: •infant industry protection. •dumping its product. •giving preferential treatment to domestic consumers.   •charging higher prices to foreign consumers. 2The tariff imposed to punish a foreign discriminating monopolist is called: •antidumping duty. •a subsidy. •punitive damages. •a fine. 3A monopoly firm operating with no trade.
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(Figure: The Home and World Markets) The loss of consumer surplus in the home country is: •$480. •$540. •$160. •$600. (Figure: The Home and World Markets) The terms-of-trade gain is _______, and the deadweight loss is ______ . •$120; $160 •$160; $160 •$160; $120 •$120; $120 23Suppose that a large country imposes.
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