Ohshit

Front 1

Question 1
1 / 1 pts
The imposition of a tariff on imported steel for the home country results in:<br>
The imposition of a tariff on imported steel for the home country results in:

Back 1

Improving terms of trade and rising volume of trade
Correct!
Higher steel prices and falling steel consumption
Lower profits for domestic steel companies
Higher unemployment for domestic steel workers*

Question 2
0 / 1 pts
Suppose the government grants a subsidy to its export firms that permits them to charge <u>lower</u> prices on goods sold abroad. The export revenue of these firms would <u>rise</u> if the foreign demand is:<br>
Suppose the government grants a subsidy to its export firms that permits them to charge lower prices on goods sold abroad. The export revenue of these firms would rise if the foreign demand is:`
Correct Answer
Elastic in response to the price reduction
Inelastic in response to the price reduction
Unit elastic in response to the price reduction
You Answered
None of the above

Front 2

Question 3
1 / 1 pts
Which trade restriction stipulates the percentage of a product's total value that must be produced domestically in order for that product to be sold domestically?<br>
Which trade restriction stipulates the percentage of a product's total value that must be produced domestically in order for that product to be sold domestically?

Back 2

Import quota
Orderly marketing agreement
Correct!
Local content requirement
Government procurement policy*

Question 4
1 / 1 pts
The imposition of a domestic content requirement by the United States would cause consumer surplus for Americans to:<br>
The imposition of a domestic content requirement by the United States would cause consumer surplus for Americans to:`
Rise
Correct!
Fall
Remain unchanged
None of the above

Front 3

Question 5
1 / 1 pts
Compared to an import quota, an equivalent tariff may provide a <u>less</u> certain amount of protection for home producers since:<br>
Compared to an import quota, an equivalent tariff may provide a less certain amount of protection for home producers since:

Back 3

A tariff has no deadweight loss in terms of production and consumption
Correct!
Foreign firms may absorb the tariff by offering exports at lower prices
Tariffs are effective only if home demand is perfectly elastic
Quotas do not result in increases in the price of the imported good

Front 4

Question 6
1 / 1 pts
Skip to question text.
Assume the U.S. has a competitive advantage in producing calculators, while the rest of the world has a competitive advantage in steel. Suppose the U.S. and the rest of the world enter into an agreement to lower import quotas below existing levels on calculators and steel. Which of the following would least likely occur for the U.S.? Rising levels of:

Back 4

Consumer surplus for American buyers of steel
Correct!
Producer surplus for American steelmakers
Production in the American calculator industry
Producer surplus for American calculator producers

Front 5

Question 7
1 / 1 pts
A producer successfully practicing international dumping would charge:<br>
A producer successfully practicing international dumping would charge:

Back 5

Correct!
A relatively higher price in the more inelastic market
A relatively higher price in the more elastic market
The same price in all markets, regardless of their elasticities
Different prices in all markets, regardless of their elasticities

Front 6

Question 8
1 / 1 pts
The practice of Canadian firms dumping their products in Sweden poses a problem for economic policymakers since dumping tends to:<br>
The practice of Canadian firms dumping their products in Sweden poses a problem for economic policymakers since dumping tends to:

Back 6

Correct!
Favor Swedish consumers over Canadian consumers
Favor Swedish producers over Canadian producers
Become widespread as firms operate at full productive capacity
Result in firms charging prices above the total costs of production

Front 7

Question 9
1 / 1 pts
Export subsidies levied by foreign governments on products in which the United States has a comparative disadvantage:<br>
Export subsidies levied by foreign governments on products in which the United States has a comparative disadvantage:

Back 7

Lower the welfare of all Americans
Correct!
Lead to increases in U.S. consumer surplus
Encourage U.S. production of competing goods
Encourage U.S. workers to demand higher wages

Front 8

Question 10
1 / 1 pts
If import licenses are auctioned off to domestic importers in a competitive market, their scarcity value (revenue effect) accrues to:<br>
If import licenses are auctioned off to domestic importers in a competitive market, their scarcity value (revenue effect) accrues to:

Back 8

Foreign corporations
Foreign workers
Domestic corporations
Correct!
The domestic government

Front 9

Question 11
1 / 1 pts
A specification of a maximum amount of a foreign produced good that will be allowed to enter the country over a given time period is referred to as:<br>
A specification of a maximum amount of a foreign produced good that will be allowed to enter the country over a given time period is referred to as:

Back 9

A domestic subsidy
An export subsidy
Correct!
An import quota
An export quota

Front 10

Question 12
1 / 1 pts
Import quotas tend to lead to all of the following <u>except</u>:<br>
Import quotas tend to lead to all of the following except:

Back 10

Correct!
Domestic producers of the imported good being harmed
Domestic consumers of the imported good being harmed
Prices increasing in the importing country
Prices falling in the exporting country

Front 11

Question 13
1 / 1 pts
To maintain that South Koreans are dumping their VCRs in the United States is to maintain that:<br>
To maintain that South Koreans are dumping their VCRs in the United States is to maintain that:

Back 11

Correct!
Koreans are selling VCRs in the United States below their production cost
Koreans are selling VCRs in the United States above their production cost
The cost of manufacturing VCRs in Korea is lower in Korea than in the United States since wages are lower in Korea
The cost of manufacturing VCRs in Korea is higher in Korea than in the United States since wages are higher in Korea*

Question 14
1 / 1 pts
If the home country's government grants a subsidy on a domestically produced good, domestic producers tend to:<br>
If the home country's government grants a subsidy on a domestically produced good, domestic producers tend to:`
Capture the entire subsidy in the form of higher profits
Correct!
Increase their level of production
Reduce wages paid to domestic workers
Consider the subsidy as an increase in production cost

Front 12

Question 15
1 / 1 pts
For years the U.S. government levied quotas on inexpensive oil imported from the Middle East. The quotas led to cost increases for U.S. consumers totaling $3 billion for oil products. An apparent justification for this policy was that:<br>
For years the U.S. government levied quotas on inexpensive oil imported from the Middle East. The quotas led to cost increases for U.S. consumers totaling $3 billion for oil products. An apparent justification for this policy was that:

Back 12

U.S. oil companies and workers deserved higher incomes
U.S. oil was of superior quality and merited higher prices
Correct!
One should not be too dependent on foreign suppliers of crucial resources
The U.S. government needed the quota revenue to balance its budget

Front 13

Question 16
1 / 1 pts
Skip to question text.
In certain industries, Japanese employers do not lay off workers. Therefore, they sometimes have excess supplies of goods that they cannot sell on the home market without lowering prices. To hold down losses, they sell goods in overseas markets at prices well beneath those in Japan. This practice is best referred to as:

Back 13

Orderly marketing
Trigger pricing
Domestic content pricing
Correct!
Dumping

Front 14

Consider Figure 5.1. With free trade, the quantity of steel imported by Mexico equals:

Back 14

2 tons
4 tons
Correct!
6 tons
8 tons

Front 15

Consider Figure 5.1. With free trade, Mexico's consumer surplus and producer surplus respectively equal:

Back 15

$2000 and $1200
Correct!
$3200 and $200
$3600 and $800
$4000 and $600

Front 16

Question 19


Consider Figure 5.1. Suppose the Mexican government provides a subsidy of $200 per ton to its steel producers, as indicated by the supply schedule SM (with subsidy).

The quantity of imports equals:

Back 16

1 ton
2 tons
3 tons
Correct!
4 tons

Front 17

The total cost of the subsidy to the Mexican government equals:

Back 17

$200
$400
$600
Correct!
$800

Front 18

Referring to Figure 5.2, consider if ABC Inc. sells 27 calculators at a price of $5 each, realizing profits totaling $54. Of this quantity, ABC Inc. sells ____ calculators in Canada and realizes revenues totaling $____; the firm sells ____ calculators in France and realizes revenues totaling $____.

Back 18

15, $35, 9, $45
15, $45, 9, $35
Correct!
21, $105, 6, $30
21, $30, 6, $105

Front 19

Question 22
1 / 1 pts
The Export-Import Bank of the United States encourages American firms to sell overseas by providing direct loans and loan guarantees to foreign purchasers of American goods. To American firms, this represents a:<br>
The Export-Import Bank of the United States encourages American firms to sell overseas by providing direct loans and loan guarantees to foreign purchasers of American goods. To American firms, this represents a:

Back 19

Specific subsidy
Ad valorem subsidy
Domestic subsidy
Correct!
Export subsidy

Front 20

Question 23
1 / 1 pts
The Smoot-Hawley Tariff Act of 1930 has generally been associated with:<br>
The Smoot-Hawley Tariff Act of 1930 has generally been associated with:

Back 20

Falling tariffs
Increases in the volume of trade
Correct!
Intensifying the worldwide depression
Efforts to liberalize nontariff trade barriers

Front 21

Question 24
1 / 1 pts
Which policy reflects the notion that if society enjoys gains due to increased efficiency stemming from trade liberalization, some sort of compensation should be provided to those who are temporarily hurt by import competition?<br>
Which policy reflects the notion that if society enjoys gains due to increased efficiency stemming from trade liberalization, some sort of compensation should be provided to those who are temporarily hurt by import competition?

Back 21

Countervailing duties
Correct!
Trade adjustment assistance
Domestic subsidies
Most-favored-nation standard

Front 22

Question 25
1 / 1 pts
The General Agreement on Tariffs and Trade and its successor, the World Trade Organization, have resulted in:<br>
The General Agreement on Tariffs and Trade and its successor, the World Trade Organization, have resulted in:

Back 22

Termination of export subsidies applied to manufactured goods
Termination of import tariffs applied to manufactured goods
Encouragement of beggar-thy-neighbor policies
Correct!
Reductions in trade barriers via multilateral negotiations

Front 23

Question 26
1 / 1 pts
Countervailing duties are intended to neutralize any unfair advantage that foreign exporters might gain over domestic producers because of foreign:<br>
Countervailing duties are intended to neutralize any unfair advantage that foreign exporters might gain over domestic producers because of foreign:

Back 23

Tariffs
Correct!
Subsidies
Quotas
Buy-national policies

Front 24

Question 27
1 / 1 pts
The U.S. "trade-remedy laws" could establish all of the following <u>except</u>:<br>
The U.S. "trade-remedy laws" could establish all of the following except:

Back 24

Import tariffs to protect U.S. firms seriously injured by foreign competition
Countervailing duties which neutralize foreign export subsidies
Antidumping duties which protect U.S. firms from imports sold at less-than-fair-value
Correct!
Economic sanctions levied against hostile nations

Front 25

Question 28
1 / 1 pts
Throughout the post-World War II era, the importance of tariffs as a trade barrier has:<br>
Throughout the post-World War II era, the importance of tariffs as a trade barrier has:

Back 25

Increased
Correct!
Decreased
Remained the same
None of the above

Front 26

Question 29
1 / 1 pts
____ attempt to produce a fair and free-trading environment in which there exists a level playing field.<br>
____ attempt to produce a fair and free-trading environment in which there exists a level playing field.

Back 26

Correct!
Trade-remedy laws
Industrial policies
Strategic trade policies
Economic sanctions

Front 27

Question 30
1 / 1 pts
Export embargoes induce greater losses in consumer surplus for the target country:<br>
Export embargoes induce greater losses in consumer surplus for the target country:

Back 27

The lesser its initial dependence on foreign produced goods
The more elastic the target country's demand schedule
The greater the available output from alternative suppliers
Correct!
The more inelastic the target country's supply schedule

Front 28

Question 31
1 / 1 pts
Suppose the president lowers tariffs on radios as the result of negotiations under the trade agreements program. Radio producers in the United States can appeal under the:<br>
Suppose the president lowers tariffs on radios as the result of negotiations under the trade agreements program. Radio producers in the United States can appeal under the:

Back 28

Correct!
Escape clause if rising imports substantially injure the U.S. radio industry
Escape clause if rising unemployment occurs even though imports remain unchanged
Infant industry clause if rising imports cause unemployment to rise among U.S. radio workers
Infant industry clause if rising imports result in losses for U.S. radio companies

Front 29

Question 32
1 / 1 pts
During the past four decades:<br>
During the past four decades:

Back 29

Nontariff barriers (NTBs) and tariffs have increased in importance
NTBs and tariffs have decreased in importance
Correct!
NTBs have increased and tariffs have decreased in importance
NTBs have decreased and tariffs have increased in importance

Front 30

Question 33
1 / 1 pts
The strongest political pressure for a trade policy that results in higher protectionism comes from:<br>
The strongest political pressure for a trade policy that results in higher protectionism comes from:

Back 30

Correct!
Domestic workers lobbying for import restrictions
Domestic workers lobbying for export restrictions
Domestic consumers lobbying for export restrictions
Domestic consumers lobbying for import restrictions

Front 31

Question 34
1 / 1 pts
The average tariff rate today on dutiable imports in the United States is approximately:<br>
The average tariff rate today on dutiable imports in the United States is approximately:

Back 31

Correct!
5 percent of the value of imports
15 percent of the value of imports
20 percent of the value of imports
25 percent of the value of imports

Front 32

Question 35
1 / 1 pts
In 1990 the United States and its allies imposed trade embargoes on exports/imports to/from Iraq in response to its invasion of Kuwait. The embargoes would induce <u>smaller</u> losses in Iraq's consumer surplus the:<br>
In 1990 the United States and its allies imposed trade embargoes on exports/imports to/from Iraq in response to its invasion of Kuwait. The embargoes would induce smaller losses in Iraq's consumer surplus the:

Back 32

Correct!
Lesser its initial dependence on foreign products
Less elastic Iraq's demand schedule
Lesser the available output from alternative suppliers
More inelastic Iraq's supply schedule

Front 33

Question 36
1 / 1 pts
In U.S. trade law, Section 301 cases involve accusations of:<br>
In U.S. trade law, Section 301 cases involve accusations of:

Back 33

International dumping by U.S. companies
Full-cost pricing by U.S. companies
Correct!
Unfair trade practices by foreign nations
Trade embargoes by foreign nations

Front 34

Question 37
1 / 1 pts
Industrial policy attempts to fulfill all of the following objectives <u>except</u>:<br>
Industrial policy attempts to fulfill all of the following objectives except:

Back 34

Improving the infrastructure for an industry
Easing transitions for workers in declining industries
Supporting troubled industries if the difficulty is temporary
Correct!
Fostering industries which offer long-run comparative disadvantage

Front 35

Question 38
1 / 1 pts
Which international organization stipulates procedures for the settlement of international trade disputes?<br>
Which international organization stipulates procedures for the settlement of international trade disputes?

Back 35

Correct!
World Trade Organization
World Bank
International Monetary Fund
Organization of Economic Development

Front 36

Question 39
1 / 1 pts
The most recent round of multilateral trade negotiations is the:<br>
The most recent round of multilateral trade negotiations is the:

Back 36

Kennedy Round
Tokyo Round
Correct!
Doha Round
Geneva Round

Front 37

Question 40
1 / 1 pts
Economic sanctions are most effective in causing the target nation to modify its behavior when the:<br>
Economic sanctions are most effective in causing the target nation to modify its behavior when the:

Back 37

Target nation had negligible economic relationships with the imposing nation prior to the sanctions
People of the target nation have weak cultural ties to the people of the imposing nation
Correct!
Sanctions are levied by a large number of nations
Target government is supported by the majority of its people

Front 38

Question 41
1 / 1 pts
An import quota is a physical restriction on the quantity of goods that may be imported during a specified time period.<br>
An import quota is a physical restriction on the quantity of goods that may be imported during a specified time period.

Back 38

Correct!
True
False

Front 39

Question 42
1 / 1 pts
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.<br>
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.

Back 39

Correct!
True
False

Front 40

Question 43
1 / 1 pts
Import quotas can yield revenue for the domestic government if it auctions import licenses to the highest bidder in a competitive market.<br>
Import quotas can yield revenue for the domestic government if it auctions import licenses to the highest bidder in a competitive market.

Back 40

Correct!
True
False

Front 41

Question 44
1 / 1 pts
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.<br>
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.

Back 41

True
Correct!
False

Front 42

Question 45
1 / 1 pts
During periods of growing demand, a tariff more effectively restricts the volume of imports than an equivalent import quota.<br>
During periods of growing demand, a tariff more effectively restricts the volume of imports than an equivalent import quota.

Back 42

True
Correct!
False

Front 43

Question 46
1 / 1 pts
An elimination of nontariff barriers on apples tends to increase apple imports, reduce profits of import-competing apple producers, and generate job losses for domestic apple workers.<br>
An elimination of nontariff barriers on apples tends to increase apple imports, reduce profits of import-competing apple producers, and generate job losses for domestic apple workers.

Back 43

Correct!
True
False

Front 44

Question 47
1 / 1 pts
By limiting the amount of foreign sourcing, local content laws are viewed as a means of jobs preservation for domestic workers.<br>
By limiting the amount of foreign sourcing, local content laws are viewed as a means of jobs preservation for domestic workers.

Back 44

Correct!
True
False

Front 45

Question 48
1 / 1 pts
Local content laws are consistent with the principle of import substitution, in which domestic production replaces the importation of goods from abroad.<br>
Local content laws are consistent with the principle of import substitution, in which domestic production replaces the importation of goods from abroad.

Back 45

Correct!
True
False

Front 46

Question 49
1 / 1 pts
To the extent that a local content requirement forces firms to locate production in a high-cost nation, product price rises and consumer surplus falls.<br>
To the extent that a local content requirement forces firms to locate production in a high-cost nation, product price rises and consumer surplus falls.

Back 46

Correct!
True
False

Front 47

Question 50
1 / 1 pts
With the passage of the Smoot-Hawley Act in 1930, U.S. average tariffs were raised to over 50 percent on protected imports.<br>
With the passage of the Smoot-Hawley Act in 1930, U.S. average tariffs were raised to over 50 percent on protected imports.

Back 47

Correct!
True
False

Front 48

Question 51
1 / 1 pts
Proponents of the Smoot-Hawley Act of 1930 viewed it as a means of combating domestic unemployment.<br>
Proponents of the Smoot-Hawley Act of 1930 viewed it as a means of combating domestic unemployment.

Back 48

Correct!
True
False

Front 49

Question 52
1 / 1 pts
It is generally agreed that the Smoot-Hawley Act of 1930 led to improvements in U.S. exports and an overall increase in U.S. output and employment.<br>
It is generally agreed that the Smoot-Hawley Act of 1930 led to improvements in U.S. exports and an overall increase in U.S. output and employment.

Back 49

True
Correct!
False

Front 50

Question 53
1 / 1 pts
Members of the General Agreement on Tariffs and Trade and its successor, the World trade through Trade Organization, agree to the principle of nondiscrimination in trade and the reduction of trade barriers by multilateral negotiations.<br>
Members of the General Agreement on Tariffs and Trade and its successor, the World trade through Trade Organization, agree to the principle of nondiscrimination in trade and the reduction of trade barriers by multilateral negotiations.
Correct!

Back 50

True
False

Front 51

Question 54
1 / 1 pts
The only members of the General Agreement on Tariffs and Trade and its successor, the World Trade Organization, are developing countries rather than developed countries.<br>
The only members of the General Agreement on Tariffs and Trade and its successor, the World Trade Organization, are developing countries rather than developed countries.

Back 51

True
Correct!
False

Front 52

Question 55
1 / 1 pts
The fast-track provision of U.S. trade law has the affect of speeding up the timetable during which the President negotiates trade agreements with foreign governments.<br>
The fast-track provision of U.S. trade law has the affect of speeding up the timetable during which the President negotiates trade agreements with foreign governments.

Back 52

Correct!
True
False

Front 53

Question 56
1 / 1 pts
U.S. antidumping duties are intended to neutralize exports to the United States at prices below average total cost or exports to the United States at prices lower than those charged in the exporter's home market.<br>
U.S. antidumping duties are intended to neutralize exports to the United States at prices below average total cost or exports to the United States at prices lower than those charged in the exporter's home market.

Back 53

Correct!
True
False

Front 54

Question 57
1 / 1 pts
Intellectual property refers to holdings of rare books and pieces of art that are traded on the world market.<br>
Intellectual property refers to holdings of rare books and pieces of art that are traded on the world market.

Back 54

True
Correct!
False

Front 55

Question 58
1 / 1 pts
Copyrights, trademarks, and patents are used to protect the intellectual property of a nation from foreign imitators.<br>
Copyrights, trademarks, and patents are used to protect the intellectual property of a nation from foreign imitators.

Back 55

Correct!
True
False

Front 56

Question 59
1 / 1 pts
Industrial policies of the U.S. government have included subsidizing particular firms to promote national champions, nationalizing basic industries, and encouraging cartelization of industries.<br>
Industrial policies of the U.S. government have included subsidizing particular firms to promote national champions, nationalizing basic industries, and encouraging cartelization of industries.

Back 56

True
Correct!
False

Front 57

Question 60
1 / 1 pts
The Commodity Credit Corporation makes available export credit financing for U.S. agricultural exports.<br>
The Commodity Credit Corporation makes available export credit financing for U.S. agricultural exports.

Back 57

Correct!
True
False