S05-Tariffs - Econ 340 Winter Term 2011 Study Questions...

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Econ 340 Alan Deardorff Winter Term 2011 Tariffs Study Questions Page 1 of 6 Study Questions Lecture 5 Tariffs Part 1: Multiple Choice Select the best answer of those given. 1. A specific tariff is a. Any tax on a particular imported good (as opposed to one on all imports). b. An import tax that must be paid in kind (giving the government the good itself). c. A requirement to pay the government a specified fraction of the monetary value of an imported good. d. A tax on imports defined as an amount of currency per unit of the good. e. The revenue that the government earns by auctioning off import quotas. 2. A tariff on imports benefits domestic producers of the imported good because a. They get the tariff revenue. b. It raises the price for which they can sell their product on the domestic market. c. It prevents imports from rising above a specified quantity. d. It reduces their producer surplus, making them more efficient. e. All of the above. 3. When a large country levies a tariff on imports a. The world price falls. b. Demanders of the good on the domestic market are hurt c. Foreigners are hurt. d. The domestic price rises by less than the tariff. e. All of the above.
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Econ 340 Alan Deardorff Winter Term 2011 Tariffs Study Questions Page 2 of 6 4. Starting from free trade, when a tariff is applied to imports in a small country, which of the following increase? I. Domestic output II. Domestic demand III. Domestic price IV. Tariff revenue V. Quantity of imports a. I and III only b. II, and IV only c. I, III, and IV only
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S05-Tariffs - Econ 340 Winter Term 2011 Study Questions...

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