chapter 6 - problems

chapter 6 - problems - QUICK QUIZ 1) Following the Uruguay...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
QUICK QUIZ 1) Following the Uruguay Round negotiations under the GA TT/WTO, U.S., Japanese, and EU tariff rates a) remain around an average of25 percent. b) have been reduced to zero, although NTBs remain in place. c) have been raised to around 30 percent because of disputes that arose during the negotiations. d) have been reduced to around 5 percent on average, but remain much higher on some goods. e) have been unaffected because the WTO deals primarily with disputes over NTBs, not tariffs. f) remain much higher than the tariff rates typical in developing countries. 2) A country's optimal export tax, assuming no retaliation by trading partners, a) is positive for a small country. b) is zero for a large country. · c) is positive for a large country. d) is zero for a small country. e) (a) and (b). f) (c) and (d). 3) The commonly used measures of average tariff levels a) overestimate actual tariff levels. b) underestimate actual tariff levels. c) accurately measure actual tariff levels. d) sometimes overestimate and sometimes underestimate actual tariff levels. e) are easy to calculate because tariffs don't vary much across industries. f) are no longer worth calculating because all tariffs are now below 3 percent. 4) The "optimal" tariff for a large country a) is always positive regardless of whether trading partners retaliate. b) is never positive because trading partners will always retaliate. c) is positive as long as the tariff is not a beggar-thy-neighbor policy. d) is always positive with no retaliation and is sometimes positive even with retaliation. e) is always lower than the optimal tariff for a small country because the large country's tariff interferes more with the market. f) is always zero. 5) The "optimal" tariff for a small country a) is always positive regardless ofwhether trading partners retaliate. b) is never positive because trading partners will always retaliate. c) is positive as long as the tariff is not a beggar-thy-neighbor policy. d) is always positive with no retaliation and is sometimes positive even with retaliation. e) is always higher than the optimal tariff for a large country. f) is always zero.
Background image of page 1

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

View Full DocumentRight Arrow Icon
6) An import tariff imposed by a small country a) reduces consumer surplus. b) increases producer surplus. c) increases the sum of consumer and producers surplus. d) decreases the sum of consumer and producer surplus. e) has the effects in (a), (b), and (c). f) has the effects on (a), (b), and (d). ANSWERS TO QUICK QUIZ 1) d. 2) f. 3) b. 4) d. 5) f. 6) f.
Background image of page 2
PROBLEMS AND QUESTIONS FOR REVIEW 1) What is a tariff, and for what reasons might a country decide to impose a tariff on imports? 2) Distinguish between specific and ad valorem tariffs. 3)
Background image of page 3

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

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/21/2011 for the course ECON 300 taught by Professor Gang during the Spring '06 term at Rutgers.

Page1 / 8

chapter 6 - problems - QUICK QUIZ 1) Following the Uruguay...

This preview shows document pages 1 - 4. Sign up to view the full document.

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