Consider table 51 prior to the tariff the total price

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54. Consider Table 5.1. Prior to the tariff, the total price of domestically-produced VCRs is: a. $150 b. $200 c. $225 d. $250 55. Consider Table 5.1. Prior to the tariff, the total price of imported VCRs is: 56. Consider Table 5.1. The nominal tariff rate on imported VCRs equals: 57. Consider Table 5.1. Prior to the tariff, domestic value added equals: 58. Consider Table 5.1. After the tariff, domestic value added equals: a. $25 b. $50 c. $75 d. $100 59. Consider Table 5.1. The effective tariff rate equals: 60. If the domestic value added before an import tariff for a product is $500 and the domestic value added after the tariff is $550, the effective rate of protection is: 11
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Chapter 5: Tariffs TRUE-FALSE QUESTIONS T F 1. To protect domestic producers from foreign competition, the U.S. government levies both import tariffs and export tariffs. T F 2. With a compound tariff, a domestic importer of an automobile might be required to pay a duty of $200 plus 4 percent of the value of the automobile. T F 3. With a specific tariff, the degree of protection afforded domestic producers varies directly with changes in import prices. T F 4. During a business recession, when cheaper products are purchased, a specific tariff provides domestic producers a greater amount of protection against import-competing goods. T F 5. A ad valorem tariff provides domestic producers a declining degree of protection against import-competing goods during periods of changing prices. T F 6. With a compound duty, its “specific” portion neutralizes the cost disadvantage of domestic manufacturers that results from tariff protection granted to domestic suppliers of raw materials, and the “ad valorem” portion of the duty grants protection to the finished-goods industry. T F 7. The nominal tariff rate signifies the total increase in domestic productive activities compared to what would occur under free-trade conditions. T F 8. When material inputs enter a country at a very low duty while the final imported product is protected by a high duty, the result tends to be a high rate of protection for domestic producers of the final product. T F 9. According to the tariff escalation effect, industrial countries apply low tariffs to imports of finished goods and high tariffs to imports of raw materials. T F 10. Under the Offshore Assembly Provision of U.S. tariff policy, U.S. import duties apply only to the value added in the foreign assembly process, provided that U.S.-made components are used by overseas companies in their assembly operations. T F 11. Bonded warehouses and foreign trade zones have the effect of allowing domestic importers to postpone and prorate over time their import duty obligations. T F 12. A nation whose imports constitute a very small portion of the world market supply is a price taker, facing a constant world price for its import commodity.
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