FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 14: The Impact of Trade Policies

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 21

Multiple Choice

Review LaterAdd Note

Review Later

Given the information on prices, production, and consumption in Question #15 above, and assuming that demand and supply curves are straight lines, what is the gain in producer surplus in country B that occurs because of the imposition of the tariff?

A) $56
B) $140
C) $348
D) $376

E) A) and B)
F) None of the above

Correct Answer

verified

Show Answer

Question 22

Multiple Choice

Review LaterAdd Note

Review Later

In the case of nonhomogeneous goods, the imposition of an import tariff

A) produces a transfer from consumers to producers in the domestic market.
B) taxes the domestic product as well as the import product.
C) has no impact on the price of the domestic substitute.
D) results in deadweight losses in both the domestic market and the import market.

E) A) and D)
F) A) and B)

Correct Answer

verified

Show Answer

Question 23

Multiple Choice

Review LaterAdd Note

Other things equal, a larger share of a tariff is more likely to be "paid" by the foreign exporting country B rather than the domestic importing country A if

If a small country produces 100 units of product X and consumes 140 units at a price of $2 under free trade, but the imposition of a tariff leads to a situation where domestic price is $2.20, domestic production is 120 units, and domestic consumption is 125 units, then the gain in producer surplus in this country because of the tariff is __________.

In Question #26 above, country A

If a (large) country B puts an export tax on a good, and assuming that world demand for The export from B is not perfectly inelastic, then, because of the tax, the price of the good In country B will __________ and the price of the good on the world market __________.

In the large-country case, an export tax

The imposition of an export tax by a home country will lead to __________ in home Country consumer surplus and will __________ in home country producer surplus.

In the following import graph, if horizontal supply line S_m shifts to horizontal line S'_m because of the imposition of a tariff,

Given the following information pertaining to large country A with respect to good X Under free trade and with a tariff in place: $\begin{array} { l r } \text { domestic price of X under free trade } & \$ 100 \\\text { world price of X under free trade } & \$ 100 \\\text { domestic price of X with tariff in place } & \$ 103 \\\text { world price of X with tariff in place } & \$ 98 \\\text { domestic production of X under free trade } & 40 \text { units } \\\text { domestic production of X with tariff in place } & 50 \text { units } \\\text { consumption of X under free trade } & 100 \text { units } \\\text { consumption of X with tariff in place } & 80 \text { units }\end{array}$ What is the impact of the tariff upon country A's welfare?

In the following offer curve diagram, OC_A is the free-trade offer curve of country A, OC_B is the free-trade offer curve of country B, and OC'_A (which starts at the origin O, goes to point M and then comes back horizontally to point Y') is the offer curve of country A when it has a restrictive trade policy instrument in place (while country B continues with free trade) . In this situation, the restrictive instrument that country A has employed is __________, and the resulting equilibrium position E' is __________ equilibrium position.

Given the following information pertaining to large country A with respect to good X Under free trade and with a tariff in place: $\begin{array} { l r } \text { domestic price of X under free trade } & \$ 100 \\\text { world price of X under free trade } & \$ 100 \\\text { domestic price of X with tariff in place } & \$ 103 \\\text { world price of X with tariff in place } & \$ 98 \\\text { domestic production of X under free trade } & 40 \text { units } \\\text { domestic production of X with tariff in place } & 50 \text { units } \\\text { consumption of X under free trade } & 100 \text { units } \\\text { consumption of X with tariff in place } & 80 \text { units }\end{array}$ What is the loss of consumer surplus in country A that occurs because of the imposition of the tariff?

Given the following information for (small) country A concerning a good X: $\begin{array} { l r } \text { free trade price in A } & \$ 20 \text { per unit } \\\text { tariff rate } & 20 \text { percent } \\\text { price in A, with tariff } & \$ 24 \text { per unit } \\\text { consumption in A, free trade } & 1,000 \text { units } \\\text { consumption in A, with tariff } & 900 \text { units } \\\text { production in A, free trade } & 600 \text { units } \\\text { production in A, with tariff } & 800 \text { units }\end{array}$

The diagram below shows the situation of a small country with free-trade in an imported product (at a price of $10) and the situation with a tariff on the product (at a price of $11) . In this graph, the net welfare loss (or total deadweight loss) to the country from the imposition of the tariff is __________.

How would an export quota by a home country look in the offer curve diagram? How would a subsequent increase in foreign demand for the export affect the exporting country's terms of trade and quantity of exports?

Discuss why an exporting country II, if faced with a choice between a 100-unit import quota by importing country I on a given product or a "voluntary" export restriction by II of 100 units of the product, would choose the VER. Might there be a larger import quota (for example, 120 units) that would be preferred by II to a 100-unit VER? In general terms, what considerations would be involved in this latter choice?