MultiplechoiceCh9

MultiplechoiceCh9 - Chapter 9: The Political Economy of...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 9: The Political Economy of Trade Theory Multiple Choice Questions 1. The efficiency case made for free trade is that as trade distortions such as tariffs are dismantled and removed, A. government tariff revenue will decrease, and therefore national economic welfare will decrease. B. government tariff revenue will decrease, and therefore national economic welfare will increase. C. deadweight losses for producers and consumers will decrease, hence increasing national economic welfare. D. deadweight losses for producers and consumers will decrease, hence decreasing national economic welfare. E. None of the above. Answer: C 2. The opportunity to exploit economies of scale is one of the gains to be made from removing tariffs and other trade distortions. These gains will be found by a decrease in A. world prices of imports. B. the consumption distortion loss triangle. C. the production distortion loss triangle. D. Both B and C. E. None of the above. Answer: E 3. The optimum tariff is A. the best tariff a country can obtain via a WTO negotiated round of compromises. B. the tariff, which maximizes the terms of trade gains. C.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

MultiplechoiceCh9 - Chapter 9: The Political Economy of...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online