Question 1

To the extent that domestic importing companies organize as a monopoly buyer,and foreign exporting companies behave as competitive sellers,the importing companies capture the revenue effect of a quota.

Accepted Answer

When a quota is imposed, the foreign exporting companies can no longer freely compete with each other and must sell their goods to the limited number of domestic importing companies. As a result, the importing companies can exercise monopsony power and negotiate lower prices with the foreign sellers. This allows them to capture the revenue effect of the quota, resulting in higher profits for the importing companies.

Question 2

Figure 5.6 Domestice Supply and demand for Wine - US 
-Consider Figure 5.6.In the global market for wine,the EU is willing to supply as much wine as the US demands at $8 per bottle.If the US imposes a quota of 15 bottles of wine ,how much revenue will the US government collect?

Accepted Answer

Quotas limit the quantity of goods that can be imported but do not directly generate revenue for the government. Tariffs, not quotas, are what generate revenue through taxes on imported goods.

Question 3

Figure 5.4.Venezuelan Calculator Market 
-Consider Figure 5.4.The increase in Venezuelan producer surplus under the production subsidy totals:

Accepted Answer

Producer surplus increases by the area of the rectangle formed by the subsidy amount per unit (vertical distance between the supply curves before and after the subsidy) multiplied by the new quantity produced and sold.

Question 4

An import quota is a physical restriction on the quantity of goods that may be imported during a specified time period.

Accepted Answer

An import quota is a physical restriction on the quantity of goods that may be imported during a specified time period.

Question 5

Concerning international dumping,many economists argue that "fair value" should be based on

Accepted Answer

The answer of Concerning international dumping,many economists argue that "fair...

Question 6

Figure 5.4.Venezuelan Calculator Market 
-Consider Figure 5.4.The production subsidy results in an overall welfare loss for Venezuela totaling:

Accepted Answer

The answer of Figure 5.4.Venezuelan Calculator Market 
-Consider Figure 5.4.The...

Question 7

Figure 5.6 Domestice Supply and demand for Wine - US 
-Consider Figure 5.6.In the global market for wine,the EU is willing to supply as much wine as the US demands at $8 per bottle.IF the US imposes a quota of 15 bottles of wine what will happen to consumer surplus?

Accepted Answer

The answer of Figure 5.6 Domestice Supply and demand for...

Question 8

The sugar import quotas of the U.S.government have tended to increase the market price of sugar,thus reducing the costs to the government of maintaining sugar price supports for domestic growers.

Accepted Answer

This statement is true. By limiting the amount of sugar that can be imported, the government creates a shortage and drives up the price of sugar, which in turn reduces the need for the government to provide price supports to domestic growers.

Question 9

Subsidies to domestic firms may lead to

Accepted Answer

The answer of Subsidies to domestic firms may lead to
...

Question 10

Import tariffs and import quotas yield identical protection effects,consumption effects,redistribution effects,and revenue effects.

Accepted Answer

Import tariffs and import quotas have different effects. Tariffs generate revenue for the government, while quotas do not. Tariffs can also potentially lead to domestic production, while quotas might not. Additionally, the distribution of the effects can differ as well.

Question 11

Figure 5.6 Domestice Supply and demand for Wine - US 
-Consider Figure 5.6.In the global market for wine,the EU is willing to supply as much wine as the US demands at $8 per bottle.What will happen to the price of a bottle of wine in the US if a quota of 15 bottles of wine is imposed?

Accepted Answer

The answer of Figure 5.6 Domestice Supply and demand for...

Question 12

A global import quota permits a specified number of goods to be imported each year,but does not specify where the product is shipped from and who is permitted to import.

Accepted Answer

A global import quota is not limited to a specific country or importer and only specifies the maximum limit of goods that can be imported in total. It doesn't specify any restrictions on the country of origin or the importers who are allowed to bring in the goods.

Question 13

An import quota tends to reduce the overall welfare of the importing nation by an amount equal to the protective effect,consumption effect,and the portion of the revenue effect that is captured by the domestic government.

Accepted Answer

An import quota tends to reduce the overall welfare of the importing nation, but the portion of the revenue effect captured by the domestic government (in the form of tariffs or taxes) does not reduce welfare; instead, it represents a transfer within the economy. The welfare loss is primarily due to the protective effect and consumption effect, along with any inefficiencies or distortions created in the market.

Question 14

A voluntary export agreement

Accepted Answer

A voluntary export agreement is a form of trade restriction that is usually applied by the world's major exporting nations to limit their exports of certain goods to other countries. It is usually less restrictive than a tariff or import quota, but still serves to protect the domestic industries of the importing countries by limiting competition from abroad.

Question 15

Import quotas can yield revenue for the domestic government if it auctions import licenses to the highest bidder in a competitive market.

Accepted Answer

When a government imposes an import quota, it limits the quantity of a certain product that can be imported into the country. To regulate this, import licenses are issued and can be auctioned to the highest bidder. This can yield revenue for the government because companies who want to import the product will bid on the licenses, resulting in the government earning revenue from the highest bidder.

Question 16

Figure 5.6 Domestice Supply and demand for Wine - US 
-Consider Figure 5.6.In the global market for wine,the EU is willing to supply as much wine as the US demands at $8 per bottle.IF the US imposes a quota of 15 bottles of wine,how much wine will US consumers demand,how much wine will US producers produce and how much wine will be imported?

Accepted Answer

With a quota of 15 bottles, US consumers would demand 30 bottles (point B on the demand curve). At a price of $8 per bottle, US producers would be willing to supply 15 bottles (point C on the supply curve). The difference between the quantity demanded and quantity supplied, 15 bottles, would be imported. Therefore, the answers are: US consumers demand 30 bottles, US producers produce 15 bottles and 15 bottles will be imported.

Question 17

In the post-World War II era,Nontariff trade barriers have decreased in importance relative to tariff barriers.

Accepted Answer

The answer of In the post-World War II era,Nontariff trade...

Question 18

Figure 5.6 Domestice Supply and demand for Wine - US 
-Consider Figure 5.6.In the global market for wine,the EU is willing to supply as much wine as the US demands at $8 per bottle.How much will the US produce and import in these circumstances?

Accepted Answer

At the price of $8 per bottle, the U.S. domestic supply curve intersects with the demand curve at a quantity of 5 bottles. This means that the U.S. will produce 5 bottles domestically. However, at the same price, the EU is willing to supply an additional 35 bottles, which means that the U.S. will import 35 bottles from the EU. Therefore, the total quantity of wine that the U.S. will produce and import is 5 bottles domestically and 35 bottles from the EU, for a total of 40 bottles.

Question 19

Today most industrial countries protect their industries via global import quotas rather than selective import quotas.

Accepted Answer

Most industrial countries protect their industries through selective import quotas and tariffs targeted at specific products or countries, rather than global import quotas that would apply uniformly to all imports regardless of their origin or type.

Question 20

When voluntary export limits are imposed on the world's chief exporter

Accepted Answer

When voluntary export limits (VELs) are imposed on the world's chief exporter, the exports of non-restrained suppliers may be stimulated due to reduced competition from the restricted exporter. This is known as a trade diversion effect, where consumers may switch from the restricted exporter to other suppliers. Therefore, both options A and B are correct.

Quiz 5: Nontariff Trade Barriers

To the extent that domestic importing companies organize as a monopoly buyer,and foreign exporting companies behave as competitive sellers,the importing companies capture the revenue effect of a quota.

Figure 5.6 Domestice Supply and demand for Wine - US -Consider Figure 5.6.In the global market for wine,the EU is willing to supply as much wine as the US demands at $8 per bottle.If the US imposes a quota of 15 bottles of wine ,how much revenue will the US government collect?

Figure 5.4.Venezuelan Calculator Market -Consider Figure 5.4.The increase in Venezuelan producer surplus under the production subsidy totals:

An import quota is a physical restriction on the quantity of goods that may be imported during a specified time period.

Concerning international dumping,many economists argue that "fair value" should be based on

Figure 5.4.Venezuelan Calculator Market -Consider Figure 5.4.The production subsidy results in an overall welfare loss for Venezuela totaling:

Figure 5.6 Domestice Supply and demand for Wine - US -Consider Figure 5.6.In the global market for wine,the EU is willing to supply as much wine as the US demands at $8 per bottle.IF the US imposes a quota of 15 bottles of wine what will happen to consumer surplus?

The sugar import quotas of the U.S.government have tended to increase the market price of sugar,thus reducing the costs to the government of maintaining sugar price supports for domestic growers.

Subsidies to domestic firms may lead to

Import tariffs and import quotas yield identical protection effects,consumption effects,redistribution effects,and revenue effects.

Figure 5.6 Domestice Supply and demand for Wine - US -Consider Figure 5.6.In the global market for wine,the EU is willing to supply as much wine as the US demands at $8 per bottle.What will happen to the price of a bottle of wine in the US if a quota of 15 bottles of wine is imposed?

A global import quota permits a specified number of goods to be imported each year,but does not specify where the product is shipped from and who is permitted to import.

An import quota tends to reduce the overall welfare of the importing nation by an amount equal to the protective effect,consumption effect,and the portion of the revenue effect that is captured by the domestic government.

A voluntary export agreement

Import quotas can yield revenue for the domestic government if it auctions import licenses to the highest bidder in a competitive market.

In the post-World War II era,Nontariff trade barriers have decreased in importance relative to tariff barriers.

Figure 5.6 Domestice Supply and demand for Wine - US -Consider Figure 5.6.In the global market for wine,the EU is willing to supply as much wine as the US demands at $8 per bottle.How much will the US produce and import in these circumstances?

Today most industrial countries protect their industries via global import quotas rather than selective import quotas.

When voluntary export limits are imposed on the world's chief exporter