Copyright Cengage Learning. Powered by Cognero.
Page 41
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Tariff Welfare Effects: Small-Nation Model
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
91. Changes in a “large” country’s economic conditions or trade policies can affect the terms at which it trades with other
countries.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Tariff Welfare Effects: Large-Nation Model
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
92. A “large” country, that levies a tariff on imports, cannot improve the terms at which it trades with other countries.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Tariff Welfare Effects: Large-Nation Model
KEYWORDS:
BLOOM’S: Understand
Copyright Cengage Learning. Powered by Cognero.
Page 42
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
93. For a “large” country, a tariff on an imported product may be partially absorbed by the domestic consumer via a higher
purchase price and partially absorbed by the foreign producer via a lower export price.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Tariff Welfare Effects: Large-Nation Model
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
94. If a “large” country levies a tariff on an imported good, its overall welfare increases if the monetary value of the tariff’s
consumption effect plus protective effect exceeds the monetary value of the terms-of-trade effect.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Tariff Welfare Effects: Large-Nation Model
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
95. If a “small” country levies a tariff on an imported good, its overall welfare increases if the monetary value of the
tariff’s consumption effect plus protective effect is less than the monetary value of the terms-of-trade effect.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
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Page 43
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Tariff Welfare Effects: Small-Nation Model
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
96. A tariff on steel imports tends to improve the competitiveness of domestic automobile companies.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Arguments for Trade Protection
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
97. If a tariff reduces the quantity of Japanese autos imported by the United States, over time it reduces the ability of
Japan to import goods from the United States.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Arguments for Trade Protection
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
98. A compound tariff permits a specified amount of goods to be imported at one tariff rate while any imports above this
amount are subjected to a higher tariff rate.
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Page 44
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Types of Tariffs
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
99. A tariff can be thought of as a tax on imported goods.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Tariff Effects: An Overview
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
100. Although tariffs on imported steel may lead to job gains for domestic steel workers, they can lead to job losses for
domestic auto workers.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
Copyright Cengage Learning. Powered by Cognero.
Page 45
TOPICS:
The Political Economy of Protectionism
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
101. Relatively low wages in Mexico make it impossible for U.S. manufacturers of labor-intensive goods to compete
against Mexican manufacturers.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
The Political Economy of Protectionism
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
102. According to the infant-industry argument, temporary tariff protection granted to an infant industry will help it
become competitive in the world market; when international competitiveness is achieved, the tariff should be removed.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
The Political Economy of Protectionism
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
Exhibit 4.2
In the absence of international trade, assume that the equilibrium price and quantity of motorcycles in Canada is $14,000
and 10 units respectively. Assuming that Canada is a small country that is unable to affect the world price of motorcycles,
suppose its market is opened to international trade. As a result, the price of motorcycles falls to $12,000 and the total
quantity demanded rises to 14 units; out of this total, 6 units are produced in Canada while 8 units are imported. Now
assume that the Canadian government levies an import tariff of $1,000 on motorcycles.
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Page 46
103. Refer to Exhibit 4.2. As a result of the tariff, the price of imported motorcycles equals $13,000 and imports total 4
cycles.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
True / False
HAS VARIABLES:
False
PREFACE NAME:
Exhibit 4.2
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Tariff Welfare Effects: Small-Nation Model
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
104. Refer to Exhibit 4.2. The tariff leads to an increase in Canadian consumer surplus totaling $11,000.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
True / False
HAS VARIABLES:
False
PREFACE NAME:
Exhibit 4.2
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Tariff Welfare Effects: Small-Nation Model
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
105. Refer to Exhibit 4.2. The tariff’s redistribution effect equals $7,000.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
True / False
HAS VARIABLES:
False
PREFACE NAME:
Exhibit 4.2
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
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Page 47
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Tariff Welfare Effects: Small-Nation Model
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
106. Refer to Exhibit 4.2. The tariff’s revenue effect equals $6,000.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
True / False
HAS VARIABLES:
False
PREFACE NAME:
Exhibit 4.2
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Tariff Welfare Effects: Small-Nation Model
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
107. Refer to Exhibit 4.2. All of the import tariff is shifted to the Canadian consumer via a higher price of motorcycles.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
PREFACE NAME:
Exhibit 4.2
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Tariff Welfare Effects: Small-Nation Model
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
108. Refer to Exhibit 4.2. The tariff leads to a deadweight welfare loss for Canada totaling $1,000.
a.
True
b.
False
ANSWER:
False
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Page 48
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
PREFACE NAME:
Exhibit 4.2
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Tariff Welfare Effects: Small-Nation Model
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
109. Unlike a specific tariff, an ad valorem tariff differentiates between commodities with different values.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Types of Tariffs
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
110. A limitation of a specific tariff is that it provides a constant level of protection for domestic commodities regardless
of fluctuations in their prices over time.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Types of Tariffs
KEYWORDS:
BLOOM’S: Understand
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Page 49
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
111. A tariff quota is a combination of a specific tariff and an ad valorem tariff.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Types of Tariffs
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
112. A specific tariff is expressed as a fixed percentage of the total value of an imported product.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Types of Tariffs
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
113. The protective effect of a tariff occurs to the extent that less efficient domestic production is substituted for more
efficient foreign production.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
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Page 50
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Effective Rate of Protection
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
114. A tariff can increase the welfare of a “large” levying country if the favorable terms-of-trade effect more than offsets
the unfavorable protective effect and consumption effect.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Tariff Welfare Effects: Large-Nation Model
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
115. If the world price of steel is $600 per ton, a specific tariff of $120 per ton is equivalent to an ad valorem tariff of 25
percent.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Types of Tariffs
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
116. An import tariff will worsen the terms of trade for a “small” country but improve the terms of trade for a “large”
country.
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Page 51
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Tariff Welfare Effects: Small-Nation Model
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
117. Suppose that the tariff on imported steel is 40 percent, the tariff on imported iron ore is 20 percent, and 30 percent of
the cost of producing a ton of steel consists of the iron ore it contains. The effective rate of protection of steel is
approximately 49 percent.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Effective Rate of Protection
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
118. There is widespread agreement among economists that import tariffs increase overall employment in the levying
country.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
Copyright Cengage Learning. Powered by Cognero.
Page 52
specialization and trade
TOPICS:
Arguments for Trade Protection
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
119. Assume that the United States imports VCRs from South Korea at a price of $200 per unit and that these VCRs are
subject to an import tariff of 20 percent. Also assume that U.S. components are used in the VCRs assembled by South
Korea and that these components have a value of $100. Under the Offshore Assembly Provision of U.S. tariff policy, the
price of an imported VCR to the U.S. consumer after the tariff has been levied is $220.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Arguments for Trade Protection
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
120. Assume that the United States imports televisions from Taiwan at a price of $300 per unit and that these televisions
are subject to an import tariff of 25 percent. Also assume that U.S. components are used in the televisions assembled by
Taiwan and that these components have a value of $100. Under the Offshore Assembly Provision of U.S. tariff policy, the
price of an imported television to the U.S. consumer after the tariff has been levied is $375
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Arguments for Trade Protection
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
121. Can import duties have unintended side effects?
ANSWER:
Yes. Duties may discourage a company from importing goods in amounts large enough to
take advantage of quantity discount pricing. Also, up-front payment of these duties may
impose financial hardships on importers.
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Tariff Effects: An Overview
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
122. What happens to effective protection when the value added by the domestic producer declines?
ANSWER:
The degree of effective protection increases.
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Effective Rate of Protection
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
123. Is it possible for a low nominal tariff rate to understate the effective rate of protection? What is tariff escalation?
ANSWER:
Yes. In some countries, the effective rate of protection is more than twice the nominal rate.
The effective rate of protection takes into account the effects of tariffs levied on raw materials
and intermediate goods. Tariff structures of industrialized nations have generally been
characterized by rates that give greater protection to intermediate and finished products than
to primary commodities. This is referred to as tariff escalation.
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Essay
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Effective Rate of Protection
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
124. How can tariffs be justified?
ANSWER:
Tariffs are justified on the grounds that they protect domestic employment and wages, help
create a level playing filed for international trade, equate the cost of imported products with
the cost of domestically produced goods, and allow domestic industries to be insulated
temporarily from foreign competition until they can grow and develop or protect industries
necessary for national security.
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Essay
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Analytic Reflective Thi – BUSPROG: Reflective Thinking
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Gains from trade, speciali – DISC: Gains from trade,
specialization and trade
TOPICS:
Arguments for Trade Protection
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
125. If a Canadian manufacturing firm uses some imported inputs in the production process, the most accurate measure of
the rate of protection is the
a.
specific tariff
b.
ad valorem tariff
c.
nominal tariff
d.
effective tariff
ANSWER:
POINTS:
DIFFICULTY:
QUESTION TYPE:
HAS VARIABLES:
NATIONAL STANDARDS:
STATE STANDARDS:
TOPICS:
KEYWORDS:
DATE CREATED:
DATE MODIFIED:
126. Assume that Mexico is a small country and it imposes a tariff on imported automobiles. As a result of the tariff
a.
the world price of automobiles falls
b.
the world price of autos remains constant
c.
the Mexican price of autos falls
d.
the Mexican price of autos remains constant
ANSWER:
POINTS: