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1) With free trade the total value of imports would equal ? a. $100,000 units b. $400,000 units c. $600,000 units d. $800,000 units
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2) Concerning import tariffs of the United States empirical studies tend to conclude that these tariffs are ? a. Progressive and thus bear down on the wealthy b. regressive and thus bear down on the poor c. proportional and thus bear down on all consumers in the same manner d. deflationary and thus result in reductions in the price of imports
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3) Concerning a government’s trade policy, all the following generally apply except ? a. economic downturn and recession generally result in greater protectionism b. because domestic consumers outnumber domestic producer’s policy markers usually enact Free-trade policies to satisfy the consumer majority: c. When domestic exporting companies are organized, policy tends to favor freer trade d. Policy tends to favor freer trade in countries whose imports are inputs into critical industries
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4) Suppose that the nominal tariff rate on finished computers is 12 percent and that the weighted average of the nominal tariff rates on the inputs used in producing computers is 18 percent. Thus, the effective rate of protection for the computer industry must ? a. be less than 12 percent and can be negative b. be less than 12 percent but must be greater than zero c. equal 6 percent d. exceed 30 percent
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5) Suppose that Pakistan imposes a tariff on ballpoint pens of 25 rupees per pen plus 12 percent of the pen’s value, this is an example of a (an) ? a. specific tariff b. ad valorem tariff c. compound tariff d. effective tariff
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6) If the world price of steel is $500 a ton a specific tariff $50 is equivalent to an ad valorem tariff of______________? a. 5 percent b. 10 percent c. 15 percent d. 20 percent
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7) In today’s world, most countries impose tariffs ? a. only on imports b. only on exports c. on both imports and exports d. on imports exports and nontraded goods
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8) Domestic producers gain ________ because on the tariff? a. $50,000 b. $75,000 c. $120,000 d. $150,000
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9) With the tariff the government collects? a. $75,000 b. $100,000 c. $125,000 d. $150,000
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10) Suppose there is no tariff on imported inputs and the ratio of the value of imported inputs the value of the final product is 0.5 If the nominal tariff rate on the final product is 10 percent, the effective tariff rate equals ? a. 5 percent b. 10 percent c. 15 percent d. 20 percent
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