Reference: Ref 8-2 Reference: Ref 8-2 Reference: Ref 8-5 Price Quantity Demanded

Question

Reference: Ref 8-2

Reference: Ref 8-2

Reference: Ref 8-5

Price

Quantity Demanded

Quantity Supplied

$100

3,200

200

$200

2,800

400

$300

2,400

600

$400

2,000

800

$500

1,600

1,000

$600

1,200

1,200

$700

800

1,400

Reference: Ref 8-6

Export Supply

Elasticity

Alloy Steel

0.27

Steel bars and rods

0.80

Steel tubes and pipes

90

Steel flat-rolled products

750

Reference: Ref 8-9

Reference: Ref 8-10

1. Most favored nation status requires: a WTO member that reduces a tariff on imports from one WTO trading partner to apply the lower tariff to imports from all other WTO members. a WTO member that reduces a tariff on imports from one WTO trading partner to apply the lower tariff to imports from all other countries. a WTO member that increases a tariff on imports from one WTO trading partner to raise the tariff on imports from all other countries. a WTO member that increases a tariff on imports from one WTO trading partner to raise the tariff on imports from all other WTO members.

Explanation / Answer

Q1. As per the Most Favored Nation status, if a member of World Trade Organization negotiates with any other country which may or may not be the member of the World Trade Organization to reduce tariff or increase import quota with respect to imports from such country then respective member country has to extend such concessions to all other member countries of World Trade Organization as well.

So, granting of MFN status to one country by a WTO member automatically extends such status to all othe member countries of WTO as well.

Thus, the correct answer is option 1 - A WTO member that reduces a tariff on imports from one WTO trading partner to apply the lower tariff to imports from all other WTO members.

Q6. After engaging in International trade -

Production in Norway = 50,000 board feet of lumber

Consumption in Norway = 200,000 board feet of lumber

Imports = Consumption - Production

               = 200,000 board feet of lumber - 50,000 board feet of lumber

               = 150,000 board feet of lumber

Thus, Norway will import 150,000 board feet of lumber.

Hence, the correct answer is option (2).

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