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Page 1
1. The imposition of a tariff on imported steel for the home country results in:
a.
Improving terms of trade and rising volume of trade
b.
Higher steel prices and falling steel consumption
c.
Lower profits for domestic steel companies
d.
Higher unemployment for domestic steel workers
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Absolute Import Quota
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
7/1/2016 3:13 PM
2. Which of the following refers to a market-sharing pact negotiated by trading partners to moderate the intensity of
international competition?
a.
Orderly marketing agreement
b.
Local content requirements
c.
Import quota
d.
Trigger price mechanism
ANSWER:
a
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Export Quotas
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
3. Suppose the United States and Japan enter into a voluntary export agreement in which Japan imposes an export quota
on its automakers. The largest share of the export quota’s “revenue effect” would tend to be captured by:
a.
b.
c.
d.
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
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Page 2
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Export Quotas
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
4. Suppose the government grants a subsidy to domestic producers of an import-competing good. The subsidy tends to
result in deadweight losses for the domestic economy in the form of the:
a.
Consumption effect
b.
Redistribution effect
c.
Revenue effect
d.
Protective effect
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Subsidies
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
5. Tariffs and quotas on imports tend to involve larger sacrifices in national welfare than would occur under domestic
subsidies. This is because, unlike domestic subsidies, import tariffs and quotas:
a.
Permit less efficient home production
b.
Distort choices for domestic consumers
c.
Result in higher tax rates for domestic residents
d.
Redistribute revenue from domestic producers to consumers
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Subsidies
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
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Page 3
DATE MODIFIED:
6/22/2016 3:19 PM
6. 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:
a.
Elastic in response to the price reduction
b.
Inelastic in response to the price reduction
c.
Unit elastic in response to the price reduction
d.
None of the above
ANSWER:
a
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Subsidies
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
7. Because export subsidies tend to result in domestic exporters charging lower prices on their goods sold overseas, the
home country’s:
a.
Export revenues will decrease
b.
Export revenues will rise
c.
Terms of trade will worsen
d.
Terms of trade will improve
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Subsidies
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
8. 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?
a.
Import quota
b.
Orderly marketing agreement
c.
Local content requirement
d.
Government procurement policy
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Page 4
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Domestic Content Requirements
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
9. The imposition of a domestic content requirement by the United States would cause consumer surplus for Americans
to:
a.
Rise
b.
Fall
c.
Remain unchanged
d.
None of the above
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Domestic Content Requirements
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
10. Domestic content legislation applied to autos would tend to:
a.
Support wage levels of American autoworkers
b.
Lower auto prices for American autoworkers
c.
Encourage American automakers to locate production overseas
d.
Increase profits of American auto companies
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Domestic Content Requirements
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Page 5
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
11. Compared to an import quota, an equivalent tariff may provide a less certain amount of protection for home producers
since:
a.
A tariff has no deadweight loss in terms of production and consumption
b.
Foreign firms may absorb the tariff by offering exports at lower prices
c.
Tariffs are effective only if home demand is perfectly elastic
d.
Quotas do not result in increases in the price of the imported good
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Absolute Import Quota
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
12. Empirical studies show that because voluntary export quotas are typically administered by exporting countries, foreign
exporters tend to:
a.
Raise their export prices, thus capturing much of the quota’s revenue effect
b.
Lower their export prices, thus losing much of the quota’s revenue effect
c.
Raise their export prices, thus selling more goods overseas
d.
Lower their export prices, thus selling fewer goods overseas
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Export Quotas
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
13. Concerning the restrictive impact of an import quota, assume there occurs an increase in the domestic demand for the
import product. As long as the quota falls short of what would be imported under free market conditions, the economy’s
adjustment to the increase in demand would take the form of:
a.
A decrease in domestic production of the import good
b.
An increase in the amount of the good being imported
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Page 6
c.
An increase in the domestic price of the import good
d.
A decrease in domestic consumption of the import good
ANSWER:
c
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Absolute Import Quota
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
14. 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:
a.
Consumer surplus for American buyers of steel
b.
Producer surplus for American steelmakers
c.
Production in the American calculator industry
d.
Producer surplus for American calculator producers
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Absolute Import Quota
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
15. A firm that faces problems of falling sales and excess productive capacity might resort to international dumping if it:
a.
Can charge higher prices in markets that are elastic to price changes
b.
Earns revenues on foreign sales that at least cover variable costs
c.
Can sell at that price where domestic and foreign demand elasticities equate
d.
Is able to force foreign prices below marginal production costs
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
Copyright Cengage Learning. Powered by Cognero.
Page 7
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Dumping
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
16. A producer successfully practicing international dumping would charge:
a.
A relatively higher price in the more inelastic market
b.
A relatively higher price in the more elastic market
c.
The same price in all markets, regardless of their elasticities
d.
Different prices in all markets, regardless of their elasticities
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Dumping
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
17. Anti-dumping law has been called unfair for all of the following reasons EXCEPT:
a.
they do not reflect currency fluctuations
b.
they are based on average variable cost
c.
they are based on average total cost
d.
all of these are reasons to call these laws unfair
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Is Anti-Dumping Law Unfair?
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
18. The United Auto Workers union attempted to win the approval of legislation that would moderate the practice of
foreign sourcing on the part of American auto manufacturers. Which of the following best represents this legislation?
a.
Voluntary export quotas
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Page 8
b.
Trigger price mechanism
c.
Tariff quotas
d.
Local content laws
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Domestic Content Requirements
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
19. The U.S.-Japaneses agreement in 1981 to limit imports of small Japanese cars to the U.S.
a.
affected Japanese automakers uniformly
b.
resulted in losses to the Japanese auto industry
c.
cost the U.S.consumer an extra $660 or so per Japanese import purchased
d.
did not save any U.S. jobs
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Export Quotas
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
20. If a tariff and an import quota lead to equivalent increases in the domestic price of steel, then:
a.
The quota results in efficiency reductions but the tariff does not
b.
The tariff results in efficiency reductions but the quota does not
c.
They have different impacts on how much is produced and consumed
d.
They have different impacts on how income is distributed
ANSWER:
d
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
Copyright Cengage Learning. Powered by Cognero.
Page 9
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Absolute Import Quota
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
21. If a tariff and an import quota lead to equivalent increases in the domestic price of steel, then:
a.
The quota results in efficiency reductions but the tariff does not
b.
The tariff results in efficiency reductions but the quota does not
c.
They have identical impacts on how much is produced and consumed
d.
They have identical impacts on how income is distributed
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Absolute Import Quota
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
22. From the perspective of the American public as a whole, export subsidies levied by overseas governments on goods
sold to the United States:
a.
Help more than they hurt
b.
Hurt more than they help
c.
Are equivalent to an import quota
d.
Are equivalent to an export quota
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Subsidies
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
23. Export subsidies levied by foreign governments on products in which the United States has a comparative
disadvantage:
a.
Lower the welfare of all Americans
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Page 10
b.
Lead to increases in U.S. consumer surplus
c.
Encourage U.S. production of competing goods
d.
Encourage U.S. workers to demand higher wages
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Absolute Import Quota
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
24. If import licenses are auctioned off to domestic importers in a competitive market, their scarcity value (revenue effect)
accrues to:
a.
b.
c.
d.
ANSWER:
d
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Absolute Import Quota
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
25. 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:
a.
A domestic subsidy
b.
An export subsidy
c.
An import quota
d.
An export quota
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
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Page 11
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Absolute Import Quota
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
26. Import quotas tend to lead to all of the following except:
a.
Domestic producers of the imported good being harmed
b.
Domestic consumers of the imported good being harmed
c.
Prices increasing in the importing country
d.
Prices falling in the exporting country
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Absolute Import Quota
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
27. To maintain that South Koreans are dumping their VCRs in the United States is to maintain that:
a.
Koreans are selling VCRs in the United States below their production cost
b.
Koreans are selling VCRs in the United States above their production cost
c.
The cost of manufacturing VCRs in Korea is lower in Korea than in the United States since wages are lower in
Korea
d.
The cost of manufacturing VCRs in Korea is higher in Korea than in the United States since wages are higher
in Korea
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Dumping
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
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Page 12
28. If the home country’s government grants a subsidy on a domestically produced good, domestic producers tend to:
a.
Capture the entire subsidy in the form of higher profits
b.
Increase their level of production
c.
Reduce wages paid to domestic workers
d.
Consider the subsidy as an increase in production cost
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Subsidies
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
29. Government subsidies may take the form of all of these EXCEPT:
a.
cash disbursements
b.
tax breaks
c.
bank credits
d.
insurance arrangements
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Subsidies
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
30. 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:
a.
Orderly marketing
b.
Trigger pricing
c.
Domestic content pricing
d.
Dumping
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
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Page 13
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Dumping
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
Figure 5.1 illustrates the steel market for Mexico, assumed to be a “small” country that is unable to affect the world price.
Suppose the world price of steel is given and constant at $200 per ton. Now suppose the Mexican steel industry is able to
obtain trade protection.
Figure 5.1. Alternative Nontariff Trade Barriers Levied by a “Small” Country
31. Consider Figure 5.1. With free trade, the quantity of steel imported by Mexico equals:
a.
2 tons
b.
4 tons
c.
6 tons
d.
8 tons
ANSWER:
c
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 5.1
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Page 14
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Subsidies
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
32. Consider Figure 5.1. With free trade, Mexico’s consumer surplus and producer surplus respectively equal:
a.
$2000 and $1200
b.
$3200 and $200
c.
$3600 and $800
d.
$4000 and $600
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 5.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Subsidies
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
33. Referring to Figure 5.1, suppose the Mexican government imposes an import quota equal to 2 tons of steel.
If Mexican steel importers behave as monopoly buyers and foreign exporters behave as competitive sellers, the overall
welfare loss of the quota to Mexico equals:
a.
$200
b.
$400
c.
$600
d.
$800
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 5.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Subsidies
KEYWORDS:
BLOOM’S: Analyze
Copyright Cengage Learning. Powered by Cognero.
Page 15
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
34. Referring to Figure 5.1, suppose the Mexican government imposes an import quota equal to 2 tons of steel.
If foreign exporters behave as monopoly sellers, and Mexican importers behave as competitive buyers, the overall welfare
loss of the quota to Mexico equals:
a.
$200
b.
$400
c.
$600
d.
$800
ANSWER:
d
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 5.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Subsidies
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
35. Referring to Figure 5.1, suppose the Mexican government imposes an import quota equal to 2 tons of steel.
If the Mexican government auctions import licenses to the highest foreign bidder, the overall welfare loss of the quota to
Mexico equals:
a.
$200
b.
$400
c.
$600
d.
$800
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 5.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Subsidies
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
Copyright Cengage Learning. Powered by Cognero.
Page 16
36. 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:
a.
1 ton
b.
2 tons
c.
3 tons
d.
4 tons
ANSWER:
d
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 5.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Subsidies
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
37. 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 total cost of the subsidy to the Mexican government equals:
a.
$200
b.
$400
c.
$600
d.
$800
ANSWER:
d
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 5.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Subsidies
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
38. 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).
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Page 17
As a result of the subsidy Mexican steel producers gain ____ of producer surplus.
a.
$200
b.
$400
c.
$600
d.
$800
ANSWER:
c
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 5.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Subsidies
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
39. Consider Figure 5.1. Suppose instead that the Mexican government provides a subsidy of $200 per ton to its steel
producers, as indicated by the supply schedule SM (with subsidy).
As a result of the subsidy, the welfare loss to Mexico due to inefficient domestic production equals:
a.
$200
b.
$400
c.
$600
d.
$800
ANSWER:
a
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 5.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Subsidies
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
40. 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 overall deadweight welfare loss to Mexico equals:
a.
$200
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Page 18
b.
$400
c.
$600
d.
$800
ANSWER:
a
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 5.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Subsidies
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
41. Consider Figure 5.1. Suppose the rest of the world voluntarily agrees to reduce steel shipments to Mexico vis-a-vis an
export quota equal to 2 tons.
Assuming Mexican importers behave as competitive buyers while foreign exporters behave as monopoly sellers, the
overall welfare loss of the quota to Mexico is:
a.
$200
b.
$400
c.
$600
d.
$800
ANSWER:
d
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 5.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Subsidies
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
42. Consider Figure 5.1. Suppose the rest of the world voluntarily agrees to reduce steel shipments to Mexico vis-a-vis an
export quota equal to 2 tons.
Assuming Mexican importers behave as monopoly buyers while foreign exporters behave as competitive sellers, the
overall welfare loss of the quota to Mexico is:
a.
$200
b.
$400
Copyright Cengage Learning. Powered by Cognero.
Page 19
c.
$600
d.
$800
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 5.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Subsidies
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
Figure 5.2 illustrates the revenue and cost conditions of ABC Inc. which sells calculators in Canada and France.
Figure 5.2. International Dumping
43. Consider Figure 5.2. In the absence of international dumping, ABC Inc. maximizes profits by selling ____ calculators
at a price of $____; the firm realizes profits totaling $____.
a.
27, $5, $54
b.
27, $5, $36
c.
24, $4, $46
d.
24, $4, $28
ANSWER:
a
POINTS:
1
DIFFICULTY:
3
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 5.2
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Dumping
Copyright Cengage Learning. Powered by Cognero.
Page 20
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
44. 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 $____.
a.
15, $35, 9, $45
b.
15, $45, 9, $35
c.
21, $105, 6, $30
d.
21, $30, 6, $105
ANSWER:
c
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 5.2
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Dumping
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
45. Consider Figure 5.2. With international dumping, ABC Inc. sells ____ calculators to Canadian buyers at a price of
$____ and ____ calculators to French buyers at a price of $____.
a.
15, $4, 12, $7
b.
15, $7, 12, $4
c.
9, $5, 15, $6
d.
9, $6, 15, $5
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 5.2
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Dumping
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:19 PM
DATE MODIFIED:
6/22/2016 3:19 PM
46. Consider Figure 5.2. Compared with the total revenue and total profit that ABC Inc. realizes in the absence of
dumping, with dumping the firm attains a: