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56) The U.S. automobile industry has attempted to counter import competition in all the following ways
EXCEPT ________.
A) concentrating on market niches that initially had less import competition
B) lobbying for customs deposits so that importers’ costs would be raised
C) moving some production to lower-cost countries and exporting to the United States
D) effecting internal adjustments, such as cost efficiencies and improved quality
57) Companies with ________ would most likely oppose global protectionist measures.
A) internationally integrated supply chains
B) domestically focused supply chains
C) multidomestic production facilities
D) product differentiation
58) In nearly half the cases in which U.S. firms have requested protection from imports, one or more
U.S. companies in the industry opposed the protection. What was the reason for opposing protection?
A) They did not want consumers to have to pay higher prices that would result from protection.
B) These were foreign-owned companies that saw the opportunity to serve the U.S. market.
C) They feared that they would lose foreign export markets because of retaliation.
D) They believed that they could compete against global and domestic rivals.
59) Which of the following is NOT causing greater complexity in the regulation of trade?
A) growth in export tariffs
B) services available over the Internet
C) heightened concern about product safety
D) development of new products that must be classified
60) The U.S. catfish industry petitioned the U.S. government for increased taxes on imported
Vietnamese fish, claiming that the fish were being sold below the cost of production. The U.S. catfish
industry was accusing the Vietnamese fish industry of ________.
A) dumping
B) using an embargo
C) subsidizing
D) using offsets
61) The U.S. catfish industry successfully petitioned the U.S. government to require that catfish varieties
imported from Vietnam be labeled as tra, basa, or pangasius. This is an example of which of the
following?
A) an embargo
B) a tariff
C) a nontariff barrier
D) a direct price influence
62) People who argue for lifting the U.S. trade embargo with Cuba claim all of the following EXCEPT
which one?
A) The embargo has not achieved its purpose of changing Cuba’s economic and political system
B) U.S. companies lose Cuban sales to competitors from other countries.
C) Increased exposure to the United States would be a more effective force of change.
D) Cuba has largely become a market economy already.
63) People who argue for keeping the U.S. trade embargo with Cuba claim all of the following EXCEPT
which one?
A) There is not much economic potential from trade given Cuba’s small population and low per capita
income.
B) Removal of the embargo will cause much more Cuban immigration to the United States.
C) If the Cuban economy is weakened just a bit more, the Cuban political-economic system cannot be
sustained.
D) There will be a backlash among countries supplying such commodities as sugar to the United States
if the U.S. buys them from Cuba instead.
64) The term protectionism, when applied to international trade, refers to governmental restrictions and
incentives to affect trade flows.
65) In most cases, trade protectionism makes it easier for a company to buy what it needs and to sell
products in global markets.
66) The group most likely to become involved in disputes concerning trade protectionism is consumers.
67) Helping a struggling domestic company through import restrictions frequently causes other countries
to retaliate.
68) The countries most likely to be successful at using trade retaliation are large trading countries.
69) On average, workers displaced by imports earn higher wages in the new jobs they accept.
70) The infant-industry argument for trade protection holds that an industry needs government
protection from imports until it becomes competitive enough in world markets.
71) Infant-industry protection requires some segment of the economy to incur the higher costs when
local production is inefficient.
72) The argument for using protectionism to bring about industrialization in developing countries
presumes that gains will occur because the industry will become internationally competitive.
73) Export prices of primary products fluctuate less than export prices of manufactured products.
74) Import substitution is a program promoting local production of products that would otherwise be
imported.
75) Export-led development refers to the off-shoring of production.
76) The argument for using import controls to promote exports is partially premised on the assumption
that other countries will remove their import restrictions as a result.
77) The comparable access argument for import restrictions is a more valid economic argument for
products using small-scale technology than for products requiring substantial economies of scale to be
competitive.
78) Countries typically establish export restrictions to encourage the development of substitute products.
79) Export controls are highly effective for digital products, such as computers, TVs, and cameras.
80) The lowering of a foreign producer’s price as a result of an imposed import tax is known as an
optimum tariff.
81) Home country consumers are typically active in preventing their domestic companies from dumping
products into foreign markets.
82) The essential-industry argument holds that industries with potential export capabilities should be
protected.
83) Import trade controls, but not export trade controls, can be used as a weapon of foreign policy.
84) The most common type of tariff is the export tariff.
85) An effective tariff is the sum of the ad valorem tariff plus the specific duty.
86) Agricultural subsidies by developed countries impede the competitiveness of agricultural exports by
developing countries.
87) When customs officials set a value on which to place an import tariff, they ordinarily use the
declared invoice price unless they doubt its authenticity.
88) A quota is a quantitative limit on the amount of a product that can be traded.
89) The purpose of “Made in” labels on imported products is to enable countries to keep records of the
origin of imports.
90) Governments sometimes prohibit operations of private companies, foreign or domestic, in some
sectors because they feel these services should not be sold at a profit.
91) At present there is little reciprocal recognition of professional licensing among countries.
92) Companies that have integrated their supply chains internationally tend to lobby their home
governments for increased protectionist measures.
93) When a company is seeking protection from imports, it can usually improve its chances of getting
that protection if it allies with most of the companies in the industry.
94) The international regulatory situation for trade is becoming more, rather than less, complex.
95) Every time countries enter a new trading agreement, service trade tends to grow more rapidly than
merchandise trade.
96) What are the disadvantages of import restrictions in regards to creating domestic employment
opportunities?
97) Explain the rationale for and problems with making the infant-industry argument work as intended.
98) Why do developing countries sometimes impose import restrictions to increase their levels of
industrialization?
99) What is the difference between import substitution policies and export-led development policies?
What are the potential effects of each?
100) Many companies and industries argue that they should have the same access to foreign markets as
foreign industries and companies have to their markets. In a short essay, discuss this issue of
“comparable access” or “fairness.”
101) What are common reasons that governments enact export restrictions? What are the possible
negative consequences of such restrictions?
102) What is dumping? What are the possible effects of dumping on a country’s economy?
103) Briefly discuss the four noneconomic rationales for governmental intervention in the free
movement of trade: maintaining essential industries, preventing shipments to unfriendly countries,
maintaining or extending spheres of influence, and preserving national identity.
104) Describe and compare the different types of tariffs (duties).
105) In a short essay, list and discuss the nontariff barriers that relate to direct price influences:
subsidies, aid and loans, customs valuations, and other direct price influences.
106) List and define the types of nontariff barriers that limit the quantity of goods traded: quotas,
embargoes, buy local legislation, standards and labels, specific permission requirements, administrative
delays, and reciprocal requirements.
107) What are the main arguments for limiting trade in services? What is your opinion on limiting trade
in services?