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18) If the United States imposes a tarif on foreign chocolate, how are U.S. buyers of
chocolate afected?
A) The price they pay for chocolate rises.
B) Their demand for chocolate increases because the U.S. production chocolate increases.
C) The quantity they consume is unchanged.
D) The price they pay for chocolate falls, but they consume less chocolate because less is
imported.
E) The price they pay for chocolate falls, and they consume more chocolate.
Skill: Level 2: Using deinitions
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
19) If the United States imposes a tarif on a good, then
A) domestic consumption of the good decreases.
B) foreign consumption of the good decreases.
C) foreign production of the good increases.
D) domestic production of the good decreases.
E) the government makes less revenue than it would have gained if it imposed a quota.
Skill: Level 2: Using deinitions
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
20) When the United States imposes a tarif on an imported good, the
A) price of the good in the United States falls.
B) quantity of the good purchased in the United States decreases.
C) quantity of the good produced in the United States decreases.
D) outcome becomes more eicient.
E) amount imported increases.
Skill: Level 2: Using deinitions
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
31
21) U.S. tarifs on Canadian lumber have led to ________ production of lumber within the
United States.
A) no change in
B) an increase in
C) the elimination of
D) a decrease in
E) making illegal the
Skill: Level 2: Using deinitions
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
22) If the government decides to impose a new tarif on orange juice from Brazil, the tarif
would lead to ________ the tarif revenue collected by the U.S. government.
A) no change in
B) an increase in
C) a decrease in
D) an elimination of
E) making illegal
Skill: Level 2: Using deinitions
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
23) The imposition of a tarif will typically ________ government revenue and ________
domestic production of the good.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
E) increase; not change
Skill: Level 2: Using deinitions
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
32
24) Country A imports 1,000 cars per month. After imposing a $50 per car tarif, imports
fall to 800 cars per month. How much does Country A's government collect in tarif
revenue?
A) $90,000
B) $50,000
C) $40,000
D) $10,000
E) $60,000
Skill: Level 3: Using models
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
25) Of the following, which group is hurt by a tarif?
A) domestic producers of the good
B) foreign consumers of the good
C) domestic consumers of the good
D) domestic government
E) foreign government
Skill: Level 2: Using deinitions
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
26) Of the following, who is harmed by a tarif?
A) domestic buyers of the good or service
B) the overall domestic economy
C) the foreign exporter of the good or service
D) domestic producers of the good or service
E) Both answers A and B are correct.
Skill: Level 2: Using deinitions
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
33
27) If a tarif is imposed on imports of shrimp into the United States, U.S. consumers
________ and U.S. producers ________.
A) gain; gain
B) gain; lose
C) lose; gain
D) lose; lose
E) gain; are unafected
Skill: Level 4: Applying models
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
28) If a tarif is imposed on imports of shrimp into the United States, U.S. consumers
________ and the U.S. economy will ________.
A) gain; gain
B) gain; lose
C) lose; gain
D) decrease; lose
E) gain; be unafected
Skill: Level 4: Applying models
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
29) If a tarif is imposed on imports of shrimp into the United States, U.S. producers
________ and the U.S. economy will ________.
A) gain; gain
B) gain; lose
C) lose; gain
D) lose; lose
E) gain; be unafected
Skill: Level 4: Applying models
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
34
30) Of the following, who gains because of tarifs and why?
A) domestic producers of protected goods because they can sell at a higher price
B) domestic buyers because they can be sure of buying high-quality products
C) foreign producers because they earn more total revenue
D) foreign government because they gain more revenue
E) domestic buyers because they pay a lower price
Skill: Level 2: Using deinitions
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
31) If tomato growers in Florida lobby the U.S. government to impose an import quota on
Mexican tomatoes, who gains from such a quota?
A) Mexican growers
B) U.S. consumers
C) U.S. growers
D) the U.S. government
E) no one
Skill: Level 2: Using deinitions
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
32) If the United States imposes a tarif on foreign chocolate, how are foreign producers of
chocolate afected?
A) Their supply increases because they have to pay the tarif.
B) They export less to the United States.
C) They earn more proit because their chocolate sells for a higher price.
D) Their supply is unafected because the quota must be met by U.S. producers.
E) The tarif has no efect on foreign producers because U.S. consumers must pay the
higher price.
Skill: Level 2: Using deinitions
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
35
33) If the United States imposes a tarif on foreign chocolate, how are U.S. producers of
chocolate afected?
A) The quantity of chocolate they sell decreases because U.S. consumption of chocolate
decreases.
B) The quantity of chocolate they produce increases.
C) The price at which they sell their chocolate falls.
D) They are harmed because foreign exporters of chocolate increase their supply in
response to the higher price.
E) They are unafected because the quota applies to foreign producers, not to U.S.
producers.
Skill: Level 2: Using deinitions
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
34) The above igure shows the U.S. market for replacement cell phone batteries. When
there is no international trade, the equilibrium price is ________ per battery and when there
is international trade the equilibrium price is ________ per battery.
A) $16; $14
B) $10; $14
C) $12; $14
D) $12; $16
E) $14; $10
Skill: Level 3: Using models
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
36
35) The above igure shows the U.S. market for replacement cell phone batteries. With free
international trade, the United States
A) exports 300,000 batteries.
B) imports 400,000 batteries.
C) imports 500,000 batteries.
D) imports 800,000 batteries.
E) exports 700,000 batteries.
Skill: Level 3: Using models
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
36) The above igure shows the U.S. market for replacement cell phone batteries. Suppose
the U.S. government imposes the tarif illustrated in the igure. The tarif is equal to
________, and the price U.S. consumers pay _______compared to the price paid when there
was free trade.
A) $2; decreases
B) $14; decreases
C) $2; increases
D) $12; increases
E) $14; increases
Skill: Level 3: Using models
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
37) The above igure shows the U.S. market for replacement cell phone batteries. With free
trade, the United States imports ________ batteries and once the tarif illustrated in the
igure is imposed, the United States imports______ batteries.
A) 900,000; 700,000
B) 800,000; 400,000
C) 300,000; 100,000
D) 700,000; 300,000
E) 900,000; 100,000
Skill: Level 3: Using models
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
37
38) The above igure shows the U.S. market for replacement cell phone batteries. With free
trade, U.S. production is equal to ________ batteries per year. When a $2 tarif is in place,
U.S. production is equal to ________ batteries per year.
A) 100,000; 300,000
B) 100,000; 500,000
C) 300,000; 100,000
D) 300,000; 500,000
E) 900,000; 700,000
Skill: Level 3: Using models
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
39) The above igure shows the U.S. market for replacement cell phone batteries. The U.S.
government collects tarif revenue of ________ on each battery imported.
A) $4
B) $14
C) $12
D) $6
E) $2
Skill: Level 3: Using models
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
40) Of the following, who gains with a tarif?
A) domestic buyers of the good or service
B) the importer of the good or service
C) the foreign exporter of the good or service
D) the government of the importing nation
E) the government of the exporting nation
Skill: Level 2: Using deinitions
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
38
41) If the U.S. government imposes a tarif on imported steel, who else besides U.S. steel
producers gains from the tarif?
A) U.S. steel consumers
B) the U.S. government
C) U.S. importers of steel
D) foreign exporters of steel
E) the foreign government
Skill: Level 2: Using deinitions
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
42) Of the following, who gains from a tarif?
A) the government of the importing country
B) the government of the exporting country
C) consumers in the importing country
D) producers in the exporting country
E) both the government of the exporting country and the government of the importing
country
Skill: Level 2: Using deinitions
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
43) Which type of policy raises the most revenue for the government?
A) tarif
B) quota
C) voluntary export restraints
D) If they are set at the same level, all of the above raise the same amount of revenue.
E) None of the above answers is correct because none of the policies raise revenue for the
government.
Skill: Level 2: Using deinitions
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
39
44) The diference between a tarif and a quota is that the tarif revenue goes to the
A) domestic consumer.
B) domestic producer.
C) domestic government.
D) holder of the quota license.
E) foreign government.
Skill: Level 2: Using deinitions
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
45) The table above gives the domestic demand and supply schedules for a good. Suppose
the world price of the good is $40 and the government imposes a $20 per unit tarif. How
much will the government collect as tarif revenue?
A) $160
B) $320
C) $80
D) $240
E) $360
Skill: Level 4: Applying models
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
46) A quota is
A) a tax on imports.
B) a speciied minimum amount that must be imported.
C) a speciied maximum amount that can be imported.
D) a tarif on exports.
E) the minimum amount that domestic irms can dump.
Skill: Level 1: Deinition
Section: Checkpoint 18.2
Status: Old
AACSB: Analytical thinking
47) A quota is a
A) quantitative restriction on an import imposed by the importing country.
B) quantitative restriction on an import imposed by the exporting country.
C) restriction on how much a customer can buy of a scarce good imposed by the seller.
D) tax that is imposed on a good when it crosses an international boundary.
E) trade barrier that does not harm domestic consumers of the good or service.
