Question 7 Suppose, to produce $200,000 worth of finished cloth in the US, texti

Question

Question 7

Suppose, to produce $200,000 worth of finished cloth in the US, textile producers import $150,000 of raw materials. The raw materials are imported duty free. However, the US has imposed a 5% nominal tariff on imports of finished cloth. What is the effective rate of protection enjoyed by the domestic cloth producers in the US?

A.20% B 10% C 10% D 5%

Question 8

A. Producer surplus Question 6 1. In Figure 1, if the free trade price was $ 10 and a $5 tariff was imposed on the imports, then how much is the deadweight loss to the society? 20 10 50 90 When a 10 percent tariff is imposed on commodity X, there is a(n) ____________ in consumer surplus and a(n) _________ in producer surplus. A. decrease, increase B.increase, decrease C.increase increase D.decrease decrease Question 9. ______________ represents payment that is made above the amount required for the producers to be willing to supply a specific amount of a commodity to the market. A. Producer surplus B. Consumer surplus C Revenue effect D Import tariff QUESTION 10 The ______________ is the tariff that maximizes the positive difference between gains associated with improvement in terms of trade and the losses resulting from reduction in the volume of trade. A optimum tariff B prohibitive tariff C nominal tariff D absolute tariff 1. In Figure 1, if the free trade price was $ 10 and a $5 tariff was imposed on the imports, then how much is the gain in producer surplus? 50 80 40 20 Question 4 1. In Figure 1, if the free trade price was $ 10 and a $5 tariff was imposed on the imports, then how much is the consumption effect of the tariff (how much will the consumer loose as a result of the tariff) ? 90 10 50 20

Explanation / Answer

Q4. 10

Q5. 50

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