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DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 4.2
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Tariff Welfare Effects: Large-Nation Model
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
46. According to Figure 4.2, the tariff’s terms-of-trade effect equals:
a.
$300
b.
$400
c.
$500
d.
$600
ANSWER:
c
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 4.2
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Tariff Welfare Effects: Large-Nation Model
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
47. According to Figure 4.2, the tariff leads to the overall welfare of the United States:
a.
Rising by $250
b.
Rising by $500
c.
Falling by $250
d.
Falling by $500
ANSWER:
c
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 4.2
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Tariff Welfare Effects: Large-Nation Model
Assume that the United States imports automobiles from South Korea at a price of $20,000 per vehicle and that these
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
48. Suppose that the production of $500,000 worth of steel in the United States requires $100,000 worth of iron ore. The
U.S. nominal tariff rates for importing these goods are 15 percent for steel and 5 percent for iron ore. Given this
information, the effective rate of protection for the U.S. steel industry is approximately:
a.
b.
c.
d.
ANSWER:
c
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
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:
Effective Rate of Protection
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
49. Suppose that the production of a $30,000 automobile in Canada requires $10,000 worth of steel. The Canadian
nominal tariff rates for importing these goods are 25 percent for automobiles and 10 percent for steel. Given this
information, the effective rate of protection for the Canadian automobile industry is approximately:
a.
b.
c.
d.
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
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:
Effective Rate of Protection
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
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Page 23
vehicles are subject to an import tariff of 20 percent. Also assume that U.S. components are used in the vehicles
assembled by South Korea and that these components have a value of $10,000.
50. Refer to Exhibit 4.1. In the absence of the Offshore Assembly Provision of U.S. tariff policy, the price of an imported
vehicle to the U.S. consumer after the tariff has been levied is:
a.
$22,000
b.
$23,000
c.
$24,000
d.
$25,000
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Exhibit 4.1
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:
Effective Rate of Protection
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
51. Refer to Exhibit 4.1. Under the Offshore Assembly Provision of U.S. tariff policy, the price of an imported vehicle to
the U.S. consumer after the tariff has been levied is:
a.
$22,000
b.
$23,000
c.
$24,000
d.
$25,000
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Exhibit 4.1
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:
Effective Rate of Protection
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
52. Suppose an importer of steel is required to pay a tariff of $20 per ton plus 5 percent of the value of steel. This is an
example of a (an):
a.
Specific tariff
b.
Ad valorem tariff
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Page 24
c.
Compound tariff
d.
Tariff quota
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
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: Remember
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
53. A compound tariff is a combination of a (an):
a.
Tariff quota and a two-tier tariff
b.
Revenue tariff and a protective tariff
c.
Import tariff and an export tariff
d.
Specific tariff and an ad valorem tariff
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
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: Remember
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
a.
$150
b.
$200
Imported VCRs
Domestic VCRs
Component parts
$150
Imported component parts
$150
Assembly cost/profit
50
Assembly cost
50
Nominal tariff
25
Profit
25
____
____
Import price
Domestic price
after tariff
225
after tariff
225
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Page 25
c.
$225
d.
$250
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Table 4.1
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
55. Consider Table 4.1. Prior to the tariff, the total price of imported VCRs is:
a.
$150
b.
$200
c.
$225
d.
$235
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Table 4.1
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
56. Consider Table 4.1. The nominal tariff rate on imported VCRs equals:
a.
11.1 percent
b.
12.5 percent
c.
16.7 percent
d.
50.0 percent
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
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Page 26
HAS VARIABLES:
False
PREFACE NAME:
Table 4.1
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
57. Consider Table 4.1. Prior to the tariff, domestic value added equals:
a.
$25
b.
$50
c.
$75
d.
$100
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Table 4.1
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
58. Consider Table 4.1. After the tariff, domestic value added equals:
a.
$25
b.
$50
c.
$75
d.
$100
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Table 4.1
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
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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
59. Consider Table 4.1. The effective tariff rate equals:
a.
11.1 percent
b.
16.7 percent
c.
50.0 percent
d.
100.0 percent
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Table 4.1
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
60. If the domestic value added before an import tariff for a product is $500 and the domestic value added after the tariff
is $550, the effective rate of protection is:
a.
b.
c.
d.
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
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
61. When a tariff on imported inputs exceeds that on the finished good,
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Page 28
a.
The nominal tariff rate on the finished product would tend to overstate its protective effect
b.
The nominal tariff rate would tend to understate it’s protective effect
c.
It is impossible to determine the protective effect of a tariff
d.
Tariff escalation occurs
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
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
62. The offshore assembly provision in the U.S.
a.
Provides favorable treatment to U.S. trading partners
b.
Discriminates against primary product importers
c.
Provides favorable treatment to products assembled abroad from U.S. manufactured components
d.
Hurts the U.S. consumer
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
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: Remember
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
63. Arguments for U.S. trade restrictions include all of the following except
a.
Job protection
b.
Infant industry support
c.
Maintenance of domestic living standard
d.
Improving incomes for developing countries
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
Figure 4.3 Domestic Market for Gasoline in the United States
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: Remember
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
64. For the United States, a foreign trade zone (FTZ) is
a.
A site within the United States
b.
A site outside the United States
c.
Always located in poorer developing countries
d.
Is used to discourage trade
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
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: Remember
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
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Page 30
65. Figure 4.3 represents the domestic market for gasoline in the United States. What is the consumer surplus in this
market?
a.
60 gallons of gasoline
b.
$120
c.
$60
d.
$3
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 4.3
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Tariff Welfare Effects: Consumer Surplus and Producer Surplus
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
66. Figure 4.3 represents the domestic market for gasoline in the United States. What is the producer surplus in this
market?
a.
60 gallons of gasoline
b.
$120
c.
$60
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Page 31
d.
$3
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 4.3
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Tariff Welfare Effects: Consumer Surplus and Producer Surplus
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
Figure 4.4 Market for Gasoline in a Small Nation
67. Figure 4.4 represents the market for gasoline in a small nation. The free trade world price of gasoline is
$3.50. Suppose this small nation imposes a tariff on gasoline of $.50 per gallon. The change in producer surplus would
be
a.
area a + b
b.
area a
c.
area a + b + f
d.
area a + b + f + g + h
ANSWER:
b
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Page 32
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 4.4
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
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
68. Figure 4.4 represents the market for gasoline in a small nation. The free trade world price of gasoline is
$3.50. Suppose this small nation imposes a tariff on gasoline of $.50 per gallon. The change in producer surplus would
be
a.
$15
b.
$12.5
c.
$47.50
d.
$57.50
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 4.4
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
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
69. Figure 4.4 represents the market for gasoline in a small nation. The free trade world price of gasoline is
$3.50. Suppose this small nation imposes a tariff on gasoline of $.50 per gallon. The change in consumer surplus would
be
a.
area a + b
b.
area a
c.
area a + b + c + d + e
d.
area a + b + f + g + h
ANSWER:
c
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
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Page 33
PREFACE NAME:
Figure 4.4
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
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
70. Figure 4.4 represents the market for gasoline in a small nation. The free trade world price of gasoline is
$3.50. Suppose this small nation imposes a tariff on gasoline of $.50 per gallon. The change in consumer surplus would
be
a.
$15
b.
$12.50
c.
$27.50
d.
$57.50
ANSWER:
c
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 4.4
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
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
71. To protect domestic producers from foreign competition, the U.S. government levies both import tariffs and export
tariffs.
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
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Page 34
DATE MODIFIED:
6/22/2016 3:18 PM
72. With a compound tariff, a domestic importer of an automobile might be required to pay a duty of $200 plus 4 percent
of the value of the automobile.
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
73. With a specific tariff, the degree of protection afforded domestic producers varies directly with changes in import
prices.
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: Remember
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
74. During a business recession, when cheaper products are purchased, a specific tariff provides domestic producers a
greater amount of protection against import-competing goods.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
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Page 35
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: Remember
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
75. A ad valorem tariff provides domestic producers a declining degree of protection against import-competing goods
during periods of changing prices.
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: Remember
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
76. With a compound duty, its “specific” portion neutralizes the cost disadvantage of domestic manufacturers that results
from tariff protection granted to domestic suppliers of raw materials, and the “ad valorem” portion of the duty grants
protection to the finished-goods industry.
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: Remember
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
77. The nominal tariff rate signifies the total increase in domestic productive activities compared to what would occur
Copyright Cengage Learning. Powered by Cognero.
Page 36
under free-trade conditions.
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:
Effective Rate of Protection
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
78. When material inputs enter a country at a very low duty while the final imported product is protected by a high duty,
the result tends to be a high rate of protection for domestic producers of the final product.
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
79. According to the tariff escalation effect, industrial countries apply low tariffs to imports of finished goods and high
tariffs to imports of raw materials.
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 37
specialization and trade
TOPICS:
Tariff Escalation
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
80. Under the Offshore Assembly Provision of U.S. tariff policy, U.S. import duties apply only to the value added in the
foreign assembly process, provided that U.S.-made components are used by overseas companies in their assembly
operations.
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:
Outsourcing and Offshore-Assembly Provision
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
81. Bonded warehouses and foreign trade zones have the effect of allowing domestic importers to postpone and prorate
over time their import duty obligations.
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:
Postponing Import Tariffs
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
82. A nation whose imports constitute a very small portion of the world market supply is a price taker, facing a constant
world price for its import commodity.
a.
True
b.
False
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Page 38
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: Small-Nation Model
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
83. Graphically, consumer surplus is represented by the area above the demand curve and below the product’s market
price.
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: Consumer Surplus and Producer Surplus
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
84. Producer surplus is the revenue producers receive over and above the minimum necessary for production.
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: Consumer Surplus and Producer Surplus
KEYWORDS:
BLOOM’S: Understand
Copyright Cengage Learning. Powered by Cognero.
Page 39
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
85. For a “small” country, a tariff raises the domestic price of an imported product by the full amount of the duty.
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: Small-Nation Model
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
86. Although an import tariff provides the domestic government additional tax revenue, it benefits domestic consumers at
the expense of domestic producers.
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
87. An import tariff reduces the welfare of a “small” country by an amount equal to the redistribution effect plus the
revenue effect.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
Copyright Cengage Learning. Powered by Cognero.
Page 40
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
88. The deadweight losses of an import tariff consist of the protection effect plus the 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: Small-Nation Model
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:18 PM
DATE MODIFIED:
6/22/2016 3:18 PM
89. The redistribution effect is the transfer of producer surplus to domestic consumers of the import-competing product.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Challenging
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
90. As long as it is assumed that a nation accounts for a negligible portion of international trade, its levying an import
tariff necessarily increases its overall welfare.
a.
True
b.
False