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Homework answers / question archive / Arizona State University ECN 306 1)When an export duty or tariff is imposed on a domestically produced good by a large country:   •             the export supply of that good will decrease and the world price of the good will increase

Arizona State University ECN 306 1)When an export duty or tariff is imposed on a domestically produced good by a large country:   •             the export supply of that good will decrease and the world price of the good will increase

Economics

Arizona State University

ECN 306

1)When an export duty or tariff is imposed on a domestically produced good by a large country:

 

•             the export supply of that good will decrease and the world price of the good will increase.

•             the export supply of the good will decrease, but production of the good in other countries will increase and the world price of the good will remain unchanged.

•             domestic producers will reduce domestic supplies of the good in order to increase export

supply of the good and the domestic price of the good will increase.

•             domestic producers will suffer losses because they will have to pay export duties without being able to increase the price of the good.

 

 

2. The assumption that any feasible change in demand for an import in a country is so small that it has almost no effect on the world market for that product is called the:

 

•             consumption effect.

•             one-dollar, one-vote metric.

•             small country assumption.

•             prohibitive tariff effect.

 

3. When a tariff is imposed on an imported product, domestic consumers of that product:

 

•             increase their consumption of both imported and domestic versions of the product.

•             are not affected by the imposition of the tariff.

•             decrease their consumption of both imported and domestic versions of the product.

•             pay a higher price for the imported product or buy less of the imported product.

 

4. The one-dollar, one-vote metric for measuring net national loss from a tariff implies that:

 

•             there is a value judgment about who specifically gains and who specifically loses from the

•             consumers' losses equal producers' gains plus government revenues from the tariff.

•             consumers' gains plus government revenues from the tariff equal producers' losses.

•             there will always be national losses when tariffs are implemented.

 

5. The percentage by which the entire set of a nation's trade barriers raises the affected industry's value added per unit of output is identified as the industry's         .

•             net added value gain.

•             effective rate of protection.

•             gross added value gain.

•             value at risk.

 

6. A(n)  is a money amount of tax per unit of an imported product.

•             excise tax

•             ad valorem tariff

•             specific tariff

 

•             general duty

 

7. When a tariff is imposed on an imported product:

 

•             domestic producers of the product can increase their prices.

•             foreign producers of the product will increase their production.

•             world prices for the product will rise in the short term.

•             there is no change in consumption or price if the importing country is a small country.

 

8. If a country's share of the world market for an imported product is large enough that the country's buying can affect the world price of that product unilaterally, that country has:

 

•             monopoly power.

•             the power to set tariffs at any rate.

•             the power to completely exclude the importation of that product.

•             monopsony power.

 

9. The international organization that now oversees global rules that apply to international trade and that serves as a forum for discussing and resolving trade disputes is the:

 

•             North American Free Trade Agreement.

•             General Agreement on Tariffs and Trade.

•             World Trade Organization.

•             European Union.

 

10. What "mercantilistic logic" has been useful for countries that have tried to justify lowering import tariffs?

 

•             That lowering import tariffs automatically increases exports

•             That other countries have lowered their import tariffs, and those countries that do not respond by lowering their own import tariffs will not benefit form the lower import tariffs in the other countries

•             That lowering import tariffs is the politic price that a country must pay to participate in the WTO and give its exporters better access to foreign markets

•             That trade is a zero-sum game

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