231_final_fall09

231_final_fall09 - Exam Name_ MULTIPLE CHOICE. Choose the...

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Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A tax of 20 cents per unit of imported garlic is an example of a(n) 1) A) ad valorem tariff. B) effective protection tariff. C) specific tariff. D) nominal tariff. E) None of the above. 2) If a good is imported into (small) country H from country F, then the imposition of a tariff In country H 2) A) lowers the price of the good in both countries. B) raises the price of the good in both countries (the "Law of One Price"). C) raises the price of the good in H and lowers it in F. D) raises the price in country H and does not affect its price in country F. E) lowers the price of the good in H and could raise it in F. 3) In the exporting country, an export subsidy will 3) A) help consumers but lower economic welfare of the exporting country. B) help consumers and raise the overall economic welfare of the exporting country. C) hurt consumers but raise the overall economic welfare of the exporting country. D) hurt consumers and lower the overall economic welfare of the exporting country. E) None of the above 4) The effective rate of protection measures 4) A) the protection given by the tariff to domestic value added. B) the quota equivalent value of a tariff. C) the "true" ad valorum value of a tariff. D) the efficiency with which the tariff is collected at the customhouse. E) None of the above. 5) The efficiency case made for free trade is that as trade distortions such as tariffs are dismantled and removed, 5) A) deadweight losses for producers and consumers will decrease, hence increasing national economic welfare. B) government tariff revenue will decrease, and therefore national economic welfare will increase. C) government tariff revenue will decrease, and therefore national economic welfare will decrease. D) deadweight losses for producers and consumers will decrease, hence decreasing national economic welfare. E) None of the above. 1
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6) The prohibitive tariff is a tariff that 6) A) is so high that it causes undue harm to trade - partner economies. B) is so low that the government prohibits its use since it would lose an important revenue source. C) is so high that it eliminates imports. D) is so high that it causes undue harm to import competing sectors. E) None of the above. 7) The median voter model 7) A) works well in the area of trade policy. B) is not intuitively reasonable. C) does not work well in the area of trade policy. D) tends to result in biased tariff rates. E) None of the above. 8) The General Agreement on Tariffs and Trade and the World Trade Organization have resulted in 8) A) the establishment of the European Union. B) the establishment of universal trade adjustment assistance policies.
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231_final_fall09 - Exam Name_ MULTIPLE CHOICE. Choose the...

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