Option A: $100,000 units
Option B: $400,000 units
Option C: $600,000 units
Option D: $800,000 units
Correct Answer: $400,000 units ✔
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Option A: Progressive and thus bear down on the wealthy
Option B: regressive and thus bear down on the poor
Option C: proportional and thus bear down on all consumers in the same manner
Option D: deflationary and thus result in reductions in the price of imports
Correct Answer: regressive and thus bear down on the poor ✔
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Option A: economic downturn and recession generally result in greater protectionism
Option B: because domestic consumers outnumber domestic producer’s policy markers usually enact Free-trade policies to satisfy the consumer majority:
Option C: When domestic exporting companies are organized, policy tends to favor freer trade
Option D: Policy tends to favor freer trade in countries whose imports are inputs into critical industries
Correct Answer: because domestic consumers outnumber domestic producer’s policy markers usually enact Free-trade policies to satisfy the consumer majority: ✔
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Option A: be less than 12 percent and can be negative
Option B: be less than 12 percent but must be greater than zero
Option C: equal 6 percent
Option D: exceed 30 percent
Correct Answer: be less than 12 percent and can be negative ✔
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Option A: specific tariff
Option B: ad valorem tariff
Option C: compound tariff
Option D: effective tariff
Correct Answer: compound tariff ✔
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Option A: 5 percent
Option B: 10 percent
Option C: 15 percent
Option D: 20 percent
Correct Answer: 10 percent ✔
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Option A: only on imports
Option B: only on exports
Option C: on both imports and exports
Option D: on imports exports and nontraded goods
Correct Answer: only on imports ✔
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Option A: $50,000
Option B: $75,000
Option C: $120,000
Option D: $150,000
Correct Answer: $75,000 ✔
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Option A: $75,000
Option B: $100,000
Option C: $125,000
Option D: $150,000
Correct Answer: $100,000 ✔
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Option A: 5 percent
Option B: 10 percent
Option C: 15 percent
Option D: 20 percent
Correct Answer: 20 percent ✔
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Option A: never
Option B: sometimes
Option C: always
Option D: None of these
Correct Answer: sometimes ✔
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Option A: the domestic price of the product will increase by more than the tariff itself
Option B: The domestic price of the product will increase by the same amount as the tariff
Option C: The domestic price of the product will increase by less than the tariff
Option D: None of the above
Correct Answer: The domestic price of the product will increase by less than the tariff ✔
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Option A: scientific tariff argument
Option B: infant industry argument
Option C: beggar they neighbor argument
Option D: foreign dumping argument
Correct Answer: infant industry argument ✔
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Option A: a revenue effect and redistribution effect
Option B: revenue effect and protection effect
Option C: consumption effect and protection effect
Option D: redistribution effect and consumption effect
Correct Answer: consumption effect and protection effect ✔
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Option A: distinguishes between tariffs that are effective and those that are ineffective
Option B: is the minimum level at Which a tariff becomes effective in limiting imports?
Option C: shows how effective a tariff is in raising revenue for the government
Option D: shows the increase in value added for domestic production that a particular tariff structure makes possible, in percentage terms
Correct Answer: shows the increase in value added for domestic production that a particular tariff structure makes possible, in percentage terms ✔
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Option A: fixed amount of money per unit traded
Option B: a percentage of money per unit traded
Option C: a percentage of the quantity of imports
Option D: All of the above
Correct Answer: fixed amount of money per unit traded ✔
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Option A: valid for stereos, but nor for most products imported by Pakistan
Option B: valid for most products imported by Pakistan but not for stereos
Option C: deceiving since Koreans eventually spend the dollars on Pakistani goods
Option D: deceiving since the dollars spent on a stereo built in the Pakistan eventually wind up overseas
Correct Answer: deceiving since Koreans eventually spend the dollars on Pakistani goods ✔
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Option A: equals to tariffs on imported manufactured goods
Option B: lower than tariffs on imported manufactured goods
Option C: higher than tariffs on imported manufactured goods
Option D: The highest of all tariffs
Correct Answer: lower than tariffs on imported manufactured goods ✔
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Option A: Ad valorem tariff
Option B: Specific tariff
Option C: Effective tariff
Option D: Compound tariff
Correct Answer: Ad valorem tariff ✔
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Option A: The purpose is to maintain protection for an indefinite time period
Option B: The industry is characterized by increasing returns to scale
Option C: The economy operates during a recession
Option D: The protected industry provides invaluable goods during periods of war
Correct Answer: The protected industry provides invaluable goods during periods of war ✔
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Option A: nominal tariff rate on the final product equals the effective tariff rate on the product
Option B: nominal tariff rate on the final product is greater than the effective rate on the product
Option C: nominal tariff rate on the final product is less than the effective tariff rate on the final product
Option D: None of the above
Correct Answer: nominal tariff rate on the final product equals the effective tariff rate on the product ✔
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Option A: cause foreign assemblers of computers to use more computer components that are supplied by countries other than the United States
Option B: Increase the Price of computers to consumers in the United States
Option C: Increase the Production of computers in the United States
Option D: Increase the production of computer components in the United States
Correct Answer: Increase the production of computer components in the United States ✔
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Option A: will always
Option B: will never
Option C: can sometimes
Option D: None of the above
Correct Answer: can sometimes ✔
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Option A: the country is a small country rather than a larger country
Option B: its terms of trade improve enough
Option C: The tariff enhances the welfare of its trading partners
Option D: Its government’s tax revenue increases because of the tariff
Correct Answer: its terms of trade improve enough ✔
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Option A: improve
Option B: worsen
Option C: not change
Option D: any of these
Correct Answer: not change ✔
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Option A: $10
Option B: $15
Option C: $20
Option D: $25
Correct Answer: $15 ✔
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Option A: $10,000
Option B: $25,000
Option C: $50,000
Option D: $75,000
Correct Answer: $50,000 ✔
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Option A: 12,000 units
Option B: 20,000 units
Option C: 30,000 units
Option D: 42,000 units
Correct Answer: 20,000 units ✔
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Option A: 10,000 units
Option B: 40,000 units
Option C: 42,000 units
Option D: 50,000 units
Correct Answer: 40,000 units ✔
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Option A: highest of all
Option B: higher than on manufactured goods
Option C: equal to tariffs on manufactured goods
Option D: lower than on manufactured goods
Correct Answer: lower than on manufactured goods ✔
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Option A: consumer surplus
Option B: producer surplus
Option C: deadweight costs
Option D: deadweight surplus
Correct Answer: consumer surplus ✔
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Option A: producer surplus
Option B: deadweight surplus
Option C: government surplus
Option D: consumer surplus
Correct Answer: consumer surplus ✔
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Option A: The price of autos within the nation will rise by 10 percent
Option B: The price of autos within the nation will rise by less than 10 percent
Option C: The price of autos within the nation will rise by more than 10 percent
Option D: The price of autos will not rise because of internal competition
Correct Answer: The price of autos within the nation will rise by 10 percent ✔
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Option A: a regional area within which trade with foreign nations is allowed
Option B: a free trade agreement among several nations
Option C: designed to limit exports of manufactured goods by placing export taxes on goods made within the zone
Option D: designed to promote exports by deferring imports duties on intermediate inputs and waving such duties if the final product is re-exported rather than sold domestically
Correct Answer: designed to promote exports by deferring imports duties on intermediate inputs and waving such duties if the final product is re-exported rather than sold domestically ✔
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Option A: only revenue effects
Option B: only protective effects
Option C: Both protective and revenue effects
Option D: neither protective or revenue effects
Correct Answer: Both protective and revenue effects ✔
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Option A: fixed amounts of money per unit traded
Option B: a percentage of the price of the product
Option C: a percentage of the quantity of imports
Option D: All of the above
Correct Answer: a percentage of the price of the product ✔
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Option A: In the interest of the U.S as a whole but not in the interest of the state of Pennsylvania where steel mills are located
Option B: In the interest of the U.S as a whole and in the interest of the state of Pennsylvania
Option C: Not in the interest of the U.S as a whole, but it might be in the interest of the state of Pennsylvania
Option D: Not in the interest of the U.S as a whole, nor in the interest of the state of Pennsylvania
Correct Answer: Not in the interest of the U.S as a whole, but it might be in the interest of the state of Pennsylvania ✔
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Option A: Compound tariff
Option B: Effective tariff
Option C: Ad valorem tariff
Option D: Specific tariff
Correct Answer: Specific tariff ✔
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