Deck 6: Tariffs

Question 1

A tariff can ________ raise a country's welfare.

A)never
B)sometimes
C)always

Answer 1

B

Question 2

Refer to the figure above.With free trade,the total quantity of imports would equal

A)10,000 units.
B)20,000 units.
C)22,000 units.
D)30,000 units.

Answer 2

B

Question 3

If a tariff of $10 has no effect on the world price,the optimal tariff on that product

A)is $10.
B)is zero.
C)is higher than $10.
D)depends upon the amount of government revenue collected.

Answer 3

B

Question 4

Most tariffs have

A)only revenue effects.
B)only protective effects.
C)both protective and revenue effects.
D)neither protective nor revenue effects.

Question 5

________ gains from trade refer to the situation where,over time,international trade leads to an outward shift in a country's production possibility frontier.

A)Static
B)Dynamic
C)Political
D)Outward

Question 6

If Canada imposes a tariff on bananas and if none are grown in Canada,this tariff has

A)only revenue effects.
B)only protective effects.
C)both protective and revenue effects.
D)neither protective nor revenue effects.

Question 7

Refer to the figure above.A tariff of ________ would be purely protective.

A)$0
B)$5
C)$8
D)$10

Question 8

Specific tariffs are collected as

A)fixed amounts of money per unit traded.
B)a percentage of the price of the product.
C)a percentage of the quantity of imports.
D)All of the above.

Question 9

If Brazil imposes a 50% tariff on automobiles and a 25% tariff on motors,the effective rate of protection on autos is

A)higher than the nominal rate of protection on autos.
B)need more information to answer.
C)lower than the nominal rate of protection on autos.
D)equal to the nominal rate of protection on autos.

Question 10

In developed countries,tariffs on raw materials tend to be

A)highest of all.
B)higher than on manufactured goods.
C)equal to tariffs on manufactured goods.
D)lower than on manufactured goods.

Question 11

A prohibitive tariff has

A)only revenue effects.
B)only protective effects.
C)both protective and revenue effects.
D)neither protective nor revenue effects.

Question 12

Refer to the figure above.The deadweight cost of the tariff equals

A)$10,000.
B)$25,000.
C)$50,000.
D)cannot be calculated without further information.

Question 13

A country gains from international trade if its post-trade ________ point lies outside its production possibility frontier.

A)production
B)autarky
C)consumption
D)All of the above

Question 14

If a tariff on bikes causes domestic bike prices to rise by 20% and domestic value added in the domestic bike industry to rise by 30%,then

A)the nominal rate of protection of bikes is 20%.
B)the effective rate of protection of bikes is 30%.
C)the effective rate of protection is higher than the nominal rate.
D)All of the above.

Question 15

Refer to the figure above.With the tariff,the government collects

A)$50,000.
B)$60,000.
C)$100,000.
D)$220,000.

Question 16

Refer to the figure above.With the tariff,the quantity of imports falls to

A)10,000 units.
B)12,000 units.
C)14,000 units.
D)22,000 units.

Question 17

Refer to the figure above.Domestic producers gain ________ because of the tariff.

A)$5
B)$62,500
C)$15
D)$125,000

Question 18

Refer to the figure above.With free trade,the total value of imports would equal

A)$10.
B)$100,000.
C)$200,000
D)$300,000.

Question 19

The difference between what consumers have to pay for a particular and what they are willing to pay is known as

A)consumer surplus.
B)producer surplus.
C)deadweight costs.
D)deadweight surplus.

Question 20

Ad valorem tariffs are collected as

A)fixed amounts of money per unit traded.
B)a percentage of the price of the product.
C)a percentage of the quantity of imports.
D)All of the above.

Question 21

Which of the following countries imposes significant tariffs on its agricultural exports?

A)Argentina
B)The U.S.
C)Canada
D)France.

Question 22

The increase in food prices around the world at the end of the 2000s decade led several developing countries to impose export tariffs on which of the following exports?

A)Rice.
B)Tomatoes.
C)Oil.
D)Bananas.

Question 23

Static gains from trade come about because trade causes consumers and producers to face a different set of prices.

Question 24

Tariff levels in developing countries tend to be ________ tariff levels in developed countries.

A)lower than
B)about equal to
C)higher than
D)there is no general pattern

Question 25

Following the imposition of the Smoot-Hawley tariff

A)international trade continued to expand.
B)more than 40 countries imposed higher tariffs of their own.
C)employment in the United States expanded rapidly.
D)Two of the above.

Question 26

All countries tend to have about the same tariff levels.

Question 27

Export tariffs are generally supported by business interests.

Question 28

Free trade is better than protection for a small country.

Question 29

Examples from the United States suggest that the cost to consumers per job saved in highly protected industries is low.

Question 30

Tariffs tend to escalate with stages of processing.

Question 31

A country can never raise its standard of living by imposing a tariff.

Question 32

As of 2008,with which of the following countries did the U.S.not have a preferential trade agreement?

A)Mexico.
B)Canada.
C)Russia.
D)Israel.

Question 33

The deadweight costs of an export tariff have similar interpretations to those of an import tariff.

Question 34

In today's world,many countries impose tariffs

A)only on imports.
B)only on exports.
C)on both imports and exports.
D)on imports, exports, and nontraded goods.

Question 35

The United States imposes tariffs

A)only on imports.
B)only on exports.
C)on both imports and exports.
D)on imports, exports, and nontraded goods.

Question 36

An increase in the tariff on semiconductors lowers the effective rate of protection of computer producers.

Question 37

The United States charges

A)the same tariff rates on goods from all countries.
B)lower tariff rates on goods from countries with most favored nation status.
C)low or zero tariffs on goods from certain developing countries.
D)Both B and C.

Question 38

Free trade is better than autarky for a small country.

Question 39

In order to provide alternatives to drug-crop production,the Andean Trade Preference Act (ATPA)was created,providing Bolivia,Colombia,Ecuador,and Peru tariff free access to U.S.markets for many goods.

Question 40

Deadweight costs of tariffs equal the sum of net changes in consumer and producer surplus brought about by the tariff.

Question 41

Why do governments generally prefer to impose tariffs over quotas?

Question 42

Write an essay on the gains from free international trade.

Question 43

Using a demand and supply diagram,illustrate the effects of a tariff on imports.In particular,show the effects on domestic production,domestic consumption,imports,prices,consumer welfare,producer welfare,government revenue,and overall economic welfare.

Question 44

Although current U.S.tariffs are quite low on average,tariffs remain high for some products.

Question 45

Tariffs can never raise a country's standard of living.True or false? Explain carefully.

Question 46

Describe with a graph the effects of an export tariff z. Include in your graph the effect on local prices,exports and local production,as well as the changes in consumer and producer surplus and corresponding changes in deadweight s.