Given that tariffs and quotas cost consumers and that they are a grossly ineffic
ID: 1168729 • Letter: G
Question
Given that tariffs and quotas cost consumers and that they are a grossly inefficient means for creating or preserving jobs, citizens nevertheless allow these policies to exist because
Select one:
a. the costs of tariffs and quotas are diffused throughout an entire nation, while the benefits are concentrated.
b. they know that petitioning the government to do the right thing is futile.
c. incentives to organize around the issue of trade policy are asymmetric.
d. all of the above.
e. A and C only.
Following the completion of the Uruguay round in 1993,
Select one:
a. direct agricultural subsidies were curtailed, but indirect payments to support farmer income were allowed.
b. indirect payments to support farmer income were banned.
c. countries were encouraged to replace tariffs on agricultural goods with agricultural quotas.
d. agricultural subsidies were banned in all cases.
Some people argue that a nation needs to be self-sufficient in some essential products such food and medicine. If there is a war, they argue, it will be difficult to import such essential items.
Select one:
a. National Security argument is a correct argument against specialization based on comparative advantage.
b. National Security argument is a correct argument against specialization based on absolute advantage.
c. National Security argument is not a correct argument, because a country can always stockpile essential goods during peacetime.
d. The argument is valid for the Ricardian case because the countries specialize completely in the Ricardian case. But the argument is not valid for the Heckscher-Ohin case due to incomplete specialization.
The labor argument for tariffs, argues that it is unfair for a country to face imports from countries that have lower wages. The problem(s) with this argument is that
Select one:
a. it ignores the fact that cross country wage differences reflect productivity differences.
b. it ignores the fact that tariffs or quotas are an expensive method of saving jobs.
c. Both A and B.
d. None of the above. The labor argument is solid.
Escape clause relief to assist domestic firms
Select one:
a. provides permanent tariffs.
b. is authorized by the U.S. and by GATT rules.
c. is authorized by the U.S.
d. A and C only.
A foreign firm may be able to avoid paying anti-dumping duties to the US government if:
Select one:
a. charges for the products it sells in the U.S. is more than the price charged in the exporter's own market.
b. falls over time, and U.S. firms are harmed by import of the product.
c. charges for the products it sells in the U.S. is slightly less than the price charged in the exporter's domestic market
d. charges in a way that U.S. firms are harmed ("material injury") by import of the product.
Dumping occurs when
Select one:
a. an exporter reduces the price of a perishable product in a foreign market.
b. an exporter gets permission from a foreign country to store large amounts of its hazardous waste.
c. an exporter sells a product in a foreign market below its domestic cost.
d. an exporter floods the foreign market with its product to establish a market presence.
Which of the following has NOT been used to determine whether a foreign firm is dumping in the domestic market?
Select one:
a. Comparing the price in third-country markets
b. Estimating the foreign firm’s production costs
c. Determining whether foreign price is above domestic marginal cost.
d. None of the above.
Which of the following category of goods faces the highest tariff as the goods enter the United States
Select one:
a. Chocolates
b. Chinese garments
c. Dairy Products
Tariffs are popular in some poor countries because
Select one:
a. Tariffs may be a major source of government revenue
b. Tariffs protect the domestic consumers
c. Tariffs are always better than subsidies.
d. Tariffs are better than domestic subsidies for smaller poor countries.
Consider the two markets below: Home (denoted by superscript H) and Export (denoted by superscript E). Marginal costs (MCH = MCE) are the same to produce in both markets, but the markets have different demand curves: DH and DE.
The firm will charge:
Select one:
a. A higher price in the home market.
b. A higher price in the export market.
c. The same price in both markets.
Consider the two markets below: Home (denoted by superscript H) and Export (denoted by superscript E). Marginal costs (MCH = MCE) are the same to produce in both markets, but the markets have different demand curves: DH and DE.
WTO will consider this to be
Select one:
a. a clear case of dumping in the Export market.
b. A case appropriate for countervailing duties that Export market government may impose.
c. A case eligible for Super 301 tariffs.
d. None of the above.
Explanation / Answer
(1) Correct option (e)
Both statements (a) ( c) are correct.
(2) Correct option (a)
Direct agricultural subsidy is not allowed.
(3) Correct option (b)
(4) Correct option (c)
Both statements A & B are correct. Lower wage reflects higher productivity and tariffs, if imposed, has higher social cost & reduces net welfare by causing deadweight loss.
(5) Correct option (b)
Escape clause provides a temporary relief to US firms & approved by GATT.
(6) Correct option (a)
Dumping refers to situation when a country sells a product in US at a price lwoer than its domestic market price.
(7) Correct option (c)
(8) Correct option (d)
None of the options is correct.
(9) Option (c)
(10) Option (d)
Tariff generates revenue for government, so small poor countries sometimes prefer tariff.
(11) Option (b)
Export market has more elastic demand, so higher price can be charged at the export market.
(12) Option (a)
Home market price is much higher than price charged in export market, despite marginal cost being the same in both cases. So this is a case of dumping.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.