Chapter8TheInstrumentsofTradePolicyMultipleChoiceQuestions1.Specifictariffsare(a)importtaxesstatedinspecificlegalstatutes.(b)importtaxescalculatedasafixedchargeforeachunitofimportedgoods.(c)importtaxescalculatedasafractionofthevalueoftheimportedgoods.(d)thesameasimportquotas.(e)Noneoftheabove.Answer:B2.Advaloremtariffsare(a)importtaxesstatedinadsinindustrypublications.(b)importtaxescalculatedasafixedchargeforeachunitofimportedgoods.(c)importtaxescalculatedasafractionofthevalueoftheimportedgoods.(d)thesameasimportquotas(e)Noneoftheabove.Answer:C3.Theexcesssupplycurveofaproductwe(H)importfromforeigncountries(F)increasesas(a)excessdemandofcountryHincreases.(b)excessdemandofcountryFincreases.(c)excesssupplyofcountryHincreases.(d)excesssupplyofcountryFincreases.(e)Noneoftheabove.Answer:D4.Ifagoodisimportedinto(large)countryHfromcountryF,thentheimpositionofatariffincountryH(a)raisesthepriceofthegoodinbothcountries(the“LawofOnePrice”).(b)raisesthepriceincountryHandcannotaffectitspriceincountryF.(c)lowersthepriceofthegoodinbothcountries.(d)lowersthepriceofthegoodinHandcouldraiseitinF.(e)raisesthepriceofthegoodinHandlowersitinF.Answer:EChapter8TheInstrumentsofTradePolicy855.Ifagoodisimportedinto(small)countryHfromcountryF,thentheimpositionofatariffIncountryH(a)raisesthepriceofthegoodinbothcountries(the“LawofOnePrice”).(b)raisesthepriceincountryHanddoesnotaffectitspriceincountryF.(c)lowersthepriceofthegoodinbothcountries.(d)lowersthepriceofthegoodinHandcouldraiseitinF.(e)raisesthepriceofthegoodinHandlowersitinF.Answer:B6.Ifagoodisimportedinto(large)countryHfromcountryF,thentheimpositionofatariffincountryHinthepresenceoftheMetzlerParadox,(a)raisesthepriceofthegoodinbothcountries(the“LawofOnePrice”).(b)raisesthepriceincountryHandcannotaffectitspriceincountryF.(c)lowersthepriceofthegoodinbothcountries.(d)lowersthepriceofthegoodinHandcouldraiseitinF.(e)raisesthepriceofthegoodinHandlowersitinF.Answer:C7.Theeffectiverateofprotectionmeasures(a)the“true”advalorumvalueofatariff.(b)thequotaequivalentvalueofatariff.(c)theefficiencywithwhichthetariffiscollectedatthecustomhouse.(d)theprotectiongivenbythetarifftodomesticvalueadded.(e)Noneoftheabove.Answer:D8.Ifthetariffoncomputersisnotchanged,butdomesticcomputerproducersshiftfromdomesticallyproducedsemiconductorstoimportedcomponents,thentheeffectiverateofprotectioninthecomputerindustrywill(a)increase.(b)decrease(c)remainthesame.(d)dependonwhethercomputersarePCsor“Supercomputers.”(e)Noneoftheabove.Answer:A9.Ifthetariffoncomputersisnotchanged,butthegovernmentthenaddshithertononexistenttariffsonimportedsemi-conductorcomponents,thentheeffectiverateofprotectioninthecomputerindustrywill(a)increase.(b)decrease(c)remainthesame.(d)dependonwhethercomputersarePCsor“Supercomputers.”(e)Noneoftheabove.Answer:B86Krugman/Obstfeld•SeventhEdition10.Ifasmallcountryimposesatariff,then(a)theproducersmustsufferaloss.(b)theconsumersmustsufferaloss.(c)thegovernmentrevenuemustsufferaloss.(d)thedemandcurvemustshifttotheleft.(e)Noneoftheabove.Answer:B11.Ifalargecountryimposesatariff,then(a)theproducersmustsufferaloss.(b)theconsumersmustsufferaloss.(c)thegovernmentrevenuemustsufferaloss.(d)thedemandcurvemustshifttotheleft.(e)Noneoftheabove.Answer:E12.Theimpositionoftariffsonimportsresultsindeadweight(triangle)losses.Theseare(a)productionandconsumptiondistortioneffects.(b)redistributioneffects.(c)revenueeffects(d)efficiencyeffects.(e)Noneoftheabove.Answer:E13.SupposetheUnitedStateseliminatesitstariffonballbearingsusedinproducingexports.BallbearingpricesintheUnitedStateswouldbeexpectedto(a)increase,andtheforeigndemandforU.S.exportswouldincrease.(b)decrease,andtheforeigndemandforU.S.exportswouldincrease.(c)increase,andtheforeigndemandforU.S.exportswoulddecrease.(d)decrease,andtheforeigndemandforU.S.exportswoulddecrease.(e)Noneoftheabove.Answer:C14.Aspecifictariffprovideshomeproducersmoreprotectionwhen(a)thehomemarketbuyscheaperproductsratherthanexpensiveproducts.(b)itisappliedtoacommoditywithmanygradevariations.(c)thehomedemandforagoodiselasticwithrespecttopricechanges.(d)itisleviedonmanufacturedgoodsratherthanprimaryproducts.(e)Noneoftheabove.Answer:AChapter8TheInstrumentsofTradePolicy8715.Alowertariffonimportedsteelwouldmostlikelybenefit(a)foreignproducersattheexpenseofdomesticconsumers.(b)domesticmanufacturersofsteel.(c)domesticconsumersofsteel.(d)workersinthesteelindustry.(e)Noneoftheabove.Answer:C16.Whenagovernmentallowsrawmaterialsandotherintermediateproductstoenteracountrydutyfree,thisgenerallyresultsina(an)(a)effectivetariffratelessthanthenominaltariffrate.(b)nominaltariffratelessthantheeffectivetariffrate.(c)riseinbothnominalandeffectivetariffrates.(d)fallinbothnominalandeffectivetariffrates.(e)Noneoftheabove.Answer:B17.Ofthemanyargumentsinfavoroftariffs,theonethathasenjoyedsignificanteconomicjustificationhasbeenthe(a)cheapforeignlaborargument.(b)infantindustryargument.(c)evenplayingfieldargument.(d)balanceofpaymentsargument(e)domesticlivingstandardargument.Answer:B18.Themainredistributioneffectofatar