978-1259723223 Test Bank TBChap040 Part 4

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written consent of McGraw-Hill Education.

A c c e s s i b i l i t y : Keyboard Navigation

Blooms: Analyze

Diff ic ul ty : 03 Hard

Learning Objective: 40-04 Analyze the economic effects of tariffs and quotas.

Test Bank: I

T o p ic : Trade Barriers and Export Subsidies

96. The accompanying table gives domestic supply and demand schedules for a product.

Suppose that the world price of the product is $1.

Quantity

Supplied

(Domestic)

Price

Quantity

Demanded

(Domestic)

12

$5

2

10

4

7

3

7

4

2

11

1

16

If the economy was opened to free trade and the world price of $1 prevailed, the price and

quantity sold of this product would be

97. The accompanying table gives domestic supply and demand schedules for a product.

Suppose that the world price of the product is $1.

Quantity

Supplied

(Domestic)

Price

Quantity

Demanded

(Domestic)

12

$5

2

10

4

7

3

7

4

2

11

1

16

With free trade, that is, assuming no tariff, the outputs produced by domestic and foreign

producers would be

98. The accompanying table gives domestic supply and demand schedules for a product.

Suppose that the world price of the product is $1.

Quantity

Supplied

(Domestic)

Price

Quantity

Demanded

(Domestic)

12

$5

2

10

4

7

3

7

4

2

11

1

16

With a $1-per-unit tariff, price and total quantity sold will be

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AACSB: Analytical Thinking

Blooms: Analyze

Di f f i cu l t y :

03 Hard

Learning Objective: 40-04 Analyze the economic effects of tariffs and quotas.

Test Bank: I

To pi c :

Trade Barriers and Export Subsidies

Type: Table

99. The accompanying table gives domestic supply and demand schedules for a product.

Suppose that the world price of the product is $1.

Quantity

Supplied

(Domestic)

Price

Quantity

Demanded

(Domestic)

12

$5

2

10

4

7

3

7

4

2

11

1

16

With a $1-per-unit tariff, the quantities sold by foreign and domestic producers,

respectively, will be

100. The accompanying table gives domestic supply and demand schedules for a product.

Suppose that the world price of the product is $1.

Quantity

Supplied

(Domestic)

Price

Demanded

(Domestic)

12

$5

2

10

4

7

3

7

4

2

11

1

16

With a $1-per-unit tariff, prices (revenue per unit) received by domestic and foreign

producers respectively will be

101. The accompanying table gives domestic supply and demand schedules for a product.

Suppose that the world price of the product is $1.

Quantity

Supplied

(Domestic)

Price

Quantity

Demanded

(Domestic)

12

$5

2

10

4

7

3

7

4

2

11

1

16

The total amount of revenue collected from a $1-per-unit tariff on this product will be

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D. $14.

102. A protective tariff will

103. Other things equal, a tariff is

104. In comparing a tariff and an import quota, we find that

105. Other things equal, economists would prefer

106.

Refer to the diagram, where Sd and Dd are the domestic supply and demand for a product

and Pc is the world price of that product. Sd + Q is the product supply curve after an

import quota is imposed. The size of the import quota

107.

Refer to the diagram, where Sd and Dd are the domestic supply and demand for a product

and Pc is the world price of that product. Sd + Q is the product supply curve after an

import quota is imposed. The effect of the import quota on domestic price and domestic

consumption is

108.

Refer to the diagram, where Sd and Dd are the domestic supply and demand for a product

and Pc is the world price of that product. Sd + Q is the product supply curve after an

import quota is imposed. Assuming there is no tariff, the import quota

109.

Refer to the diagram, where Sd and Dd are the domestic supply and demand for a product

and Pc is the world price of that product. Sd + Q is the product supply curve after an

import quota is imposed. A tariff of PcPt or an import quota of wy will have the same

effect on

110.

Refer to the diagram, where Sd and Dd are the domestic supply and demand for a product

and Pc is the world price of that product. Sd + Q is the product supply curve after an

import quota is imposed. A tariff of PcPt will

111.

Refer to the diagram, where Sd and Dd are the domestic supply and demand for a product

and Pc is the world price of that product. Sd + Q is the product supply curve after an

import quota is imposed. A quota of wy will

113. Graphical analysis of tariffs reveals that

114. Studies show that

115. Research studies indicate that

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low-income groups.

C. the revenue from tariffs equals the total cost that tariffs impose on consumers.

D.

U.S. consumers lose more from tariffs than U.S. producers gain.

116. A high tariff on imported good X might reduce domestic employment in industry Y if

117. The increased-domestic-employment argument for tariff protection holds that

118. Which of the following arguments for trade protection contends that new domestic

industries need support to establish themselves and survive?

119. Which of the following arguments for trade protection is based on the premise that a

nation should have a wide enough range of domestic industries to be self-sufficient if

necessary?

120. Which of the following arguments contends that certain industries need to be protected

in the interest of national security?

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Blooms: Analyze

Di ff ic ul ty : 03 Hard

Learning Objective: 40-05 Analyze the validity of the most frequently presented arguments for

protectionism.

Test Bank: I

T o p ic : The Case for Protection: A Critical Review

121. A major difficulty with the argument that trade barriers are necessary because foreign

workers are paid low wages is that

122. As it relates to international trade, dumping

123. Dumping of goods abroad

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C. may be part of a nation’s strategy to rectify its trade deficit.

D. drives up prices of the dumped goods.

124. The World Trade Organization

125. The number of countries belonging to the World Trade Organization (WTO), as of

2015, is about

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T o p ic : Multilateral Trade Agreements and Free-Trade Zones

126. The organization created to oversee the provisions of multilateral trade agreements,

resolve disputes under the international trade rules, and meet periodically to consider

further trade liberalization is called the

127. The World Trade Organization was established as a successor to

128. Which of the following was not one of the principles on which the General Agreement

on Tariffs and Trade (GATT) was established?

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AACSB: Knowledge Application

A c c e s s i b i l i t y :

Keyboard Navigation

Blooms: Remember

Di f fi c u l t y : 01 Easy

Learning Objective: 40-06 Identify and explain the objectives of GATT, WTO, EU, eurozone,

and NAFTA, and discuss offshoring and trade adjustment assistance.

Test Bank: I

T o p ic : Multilateral Trade Agreements and Free-Trade Zones

129. The “eurozone”

130. As of 2015, how many European nations belonged to the European Union (EU)?

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A. All members of the EU use a common currency (the euro).

B.

The EU has abolished most trade barriers among participating countries and has

common tariffs applied to non-EU goods.

C. The EU has eliminated most barriers to the trade of goods and services among

participating nations but largely restricts the movement of labor and capital.

D. Trade within the EU is liberalized, but EU nations set most of their own policies with

regard to trade with non-EU nations.

132. “NAFTA” stands for

133. NAFTA