non tariff trade barriers Mcqs
1. With free trade suppose that the rest of the world can supply computers to Norway at a price of $1,500 Norways imports will now equal. Compared to What occurred in the absence of trade, Norways consumers surplus will _____ and its producer surplus will ____. Can you calculate these amounts? Try plotting the information of this table on a sheet of graph paper ?
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A. 1,600 computers, increase, decrease

B. 1,200 computers, increase, decrease

C. 1,600 computers, decrease, increase

D. 1,200 computers, decrease, increase

2. Antidumping duties are used to ?
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A. reduce the tariff revenue of the domestic government

B. discourage foreign governments from subsidizing their exporters

C. punish domestic consumers for buying high-priced imported goods

D. offset the margin of dumping
3. The welfare effects of a quota depend to a considerable extent upon ?
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A. All of the above

B. the size of the quota

C. who has the quota license

D. elasticities of domestic demand and supply

4. Import quotas tend to result in all of the following except ?
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A. Prices increasing in the importing country

B. domestic consumers of the imported good being harmed

C. Prices falling in the exporting country

D. domestic producers of the imported good being harmed
5. The form of dumping that represents the greatest potential net welfare loss the for importing national is ?
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A. sporadic dumping

B. yearend dumping

C. persistent dumping

D. predatory dumping
6. A specification of a maximum amount of a foreign produced good that will be allowed to enter the country over a given time period is referred to as a (an) ?
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A. import quota

B. domestic subsidy

C. export subsidy

D. export quota

7. A tariff-rate quota ?
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A. is a two-tier tariff system intended to restrict imports?

B. is a limit on the number of tariffs that a country can place on imports?

C. is designed to avoid the the price increases caused by simple tariffs

D. uses a single tariff along with import quotas to restrict import

8. The reason for dumping is that the demand curve for ABC Cos computers is _______ because ________ are available from other nations?
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A. more elastic in Japan, fewer substitutes are available from other; nations

B. more elastic in Japan, more substitutes are available from other nations

C. more inelastic in Japan; more substitutes are available from other; nations

D. more inelastic in Japan; fewer substitutes are available from other nations

9. To reduce imports, suppose that the government of Norways imposes a quota equal to 800 computers, Compared to what occurred under free trade, Norways consumers surplus will ________ and its producer surplus will _______ Can you calculate these amounts? Try plotting the information of this table on a sheet of graph paper ?
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A. decrease, decrease

B. increase, decrease

C. decrease, increase

D. increase, increase

10. Buy national policies ?
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A. attempt to restrict the number of tourists leaving a nation

B. result in government purchase policies favoring domestic over foreign producers

C. result in government purchase policies favoring foreign over domestic producers

D. are intended to publicize the advantage of the most efficient domestic companies

11. The form of international price discriminations (dumping) normally associated with economic recession or excess inventories in the exporting nation is known as ?
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A. persistent dumping

B. year end dumping

C. sporadic dumping

D. Predatory dumping

12. The home country government can confiscate the revenue effect of an import quota if ?
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A. quota licenses are given to foreign exporting companies

B. quota licenses are auctioned to the highest bidding importing company

C. if quota licenses are given to domestic consumers of the good

D. Both A and C

13. In certain industries Japanese employers hesitate to lay off workers Therefore they sometimes have excess supplies of goods that they cannot sell on the home market without lowering prices. To hold down losses they sell goods in overseas markets at prices well beneath those in japan This practice is best referred to as ?
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A. Orderly marketing

B. trigger pricing

C. domestic content pricing

D. dumping
14. If imports licenses are auctioned off to domestic importers in competitive market their scarcity value (revenue effect) accrues to ?
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A. foreign corporations

B. foreign workers

C. The domestic government

D. domestic corporations

15. ________ occurs when a firm disposes on foreign markets a temporary increases in inventories caused by unforeseen changes in supply and demand conditions in the home economy?
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A. predatory dumping

B. persistent dumping

C. sporadic dumping

D. foreign dumping

16. A production subsidy that is granted to a producer of an import-competing good ?
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A. does not require government taxes to finance it

B. yields the same deadweight welfare loss as an import tariff or import quota

C. has only a protective effect deadweight loss

D. has only a consumption effect deadweight loss

17. Export subsidies levied by foreign governments on products in which the Pakistan the comparative disadvantage ?
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A. lead to increases in Pakistani consumer surplus

B. encourage Pakistani workers to demand higher wages

C. lower the welfare of all Pakistanis

D. encourage Pakistans production of competing goods

18. Suppose that the domestic government allows a specific number of goods to be imported each year, but it does not specify from where the product is shipped or who is permitted to import Such a trade barrier is known as ?
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A. a global quota

B. an import tariffs

C. a selective quota

D. a tariff rate quota

19. Similar to import tariffs import quotas tend to result in ?
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A. increased government revenue

B. increased consumer surplus

C. higher prices and reduced imports

D. decrease producer surplus

20. A(n) ________ is n example of a quota where foreigners hold quota licenses ?
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A. export quota

B. tariff quota

C. embargo

D. auction quota

21. Nontariff trade barriers could include all of the following except ?
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A. antidumping/countervailing duties applied to imports

B. domestic content laws

C. government procurement policies

D. health, safety, and environmental standards

22. Under a tariff- rate quota ?
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A. The within-quota tariff rate exceeds the over-quota tariff rate

B. The within-quota tariff rate plus over-quota tariff rate equal 100 percent

C. The within-quota tariff rate equals the over-quota tariff rate

D. the over-quota tariff rate exceeds the with-quota tariff rate
23. In the absence of trade, Canadas equilibrium price and quantity equal ?
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A. $55 and 20 calculators

B. $65 and 40 calculators

C. $45 and 25 calculators

D. $30 and 40 calculators

24. In a tariff and import quota lead to equivalent increase in the domestic price of steel, then ?
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A. The quota results in efficiency reductions but the tariff does not

B. The tariff results in efficiency reductions but the quota does not

C. They have identical impact on how much is produced and consumed

D. They have identical impact on how income is distributed

25. By practicing price discrimination, the firm would realize profits totaling ?
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A. $420,000

B. $660,000

C. $540,000

D. $160,000

26. To maintain that South koreans are dumping their DVDs in the United States is to maintain that ?
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A. The cost of manufacturing DVDs in Korea is lower in Korea than in the U.S since wages are lower in Korea

B. Koreans are selling DVDs in the U.S below their production cost

C. Koreans are selling DVDs is the U.s above their productions cost

D. The cost of manufacturing DVDs in Korea is higher in Korea than in the U.S since wages are higher in Korea

27. In the absence of traded, Norways equilibrium price and quantity equal ?
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A. $3,500 and 2,000 computers

B. $2,500 and 2,000 computers

C. $1,500 and 2,800 computers

D. $2,000 and 1,600 computers

28. A attempts to limit outsourcing of jobs to foreigners by requiring that a minimum percentage of a products value must be produced domestically if that good is to be sold in the domestic market ?
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A. voluntary restraint agreement

B. domestic subsidy

C. tariff-rate quota

D. domestic content requirement
29. ___________ are quotas that lead to a complete abolishment of trade?
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A. orderly marketing agreements

B. voluntary export restraints

C. embargoes

D. nontariff barriers

30. If the home country government grants a subsidy on a domestically produced good domestic producers tend to ?
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A. Capture the entire subsidy in the form of higher profits

B. consider the subsidy as a increase in production cost

C. Increase their level of production

D. reduce wages paid to domestic workers

31. If a tariff and import quota lead to equivalent increases in the domestic price of steel, then ?
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A. They have different impacts on how much is produced and consumed

B. the quota results in efficiency reductions but the tariff does not

C. They have different impacts on how income is distributed

D. The tariff results in efficiency reductions but the quota does not

32. From the perspective of the American public as a whole, export subsidies levied by overseas governments on goods sold to the United States ?
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A. are equivalent to an export quota

B. hurt more then they help

C. help more than they hurt

D. are equivalent to an import quota

33. international dumping may involve ?
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A. selling goods to foreigners at a price below that charged domestic consumers

B. selling goods to foreigners at a price below the cost of production

C. antidumping duties being levied on the imported, dumped goods

D. All of the above
34. According to the cost-based definition of dumping, dumping occurs when a firm sells a product abroad at a price that is less than ?
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A. average total cost

B. average variable cost

C. marginal cost

D. average fixed cost

35. For year the U.S government levied quotas on inexpensive oil imported from the Middle East The quotas led to cost increases for U.S consumers totaling $3 billion for oil products. An apparent justification of this policy was that ?
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A. U.S oil companies and workers deserved higher incomes

B. one should not be too dependent on foreign suppliers of crucial resources

C. The U.S government needed the quota revenue to balance its budget

D. U.S oil was of superior quality and merited higher prices

36. ________ are profits that accrue to whomever has the right to import the good that is restricted by the quota?
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A. None of the above

B. quota prices

C. quota license

D. quota rents
37. To aid its calculator producers, suppose that the government provides them a subsidy of $10 for each calculator produced The amount of imports now equals _____ and the deadweight loss of the subsidy to the Canadian economy equals _________?
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A. 20 calculator, $50

B. 25 calculator, $100

C. 25 calculator, $50

D. 20 calculator, $100

38. Which company in the United States would likely be most concerned about Brazils dumping of steel in the U.S market ?
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A. Sneva Construction Co. The builder of skyscrapers

B. Tennessee Mining Co. an iron-ore mining company

C. General Motors, the manufacturer of automobiles

D. Caterpillar Corp the producer of earth moving equipment

39. With free trade, suppose that the rest of the world can supply calculators to Canada at a price of $30. Canadas imports would now equal _____ and its consumer surplus would ____ relative to what occurred in the absence of trade. What is the change in consumer surplus? Refer to the figure that you have plotted ?
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A. 30 calculators increase

B. 25 calculators decrease

C. 25 calculators increase

D. 20 calculators increase

40. Governments around the world tend to auction quota licenses ?
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A. always

B. often

C. never

D. seldom
41. What type of trade barrier was used to protect U.S auto firms from foreign competition during 1981 1984 ?
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A. export quotas imposed by the Japanese government

B. export tariffs imposed by the Japaneses government

C. domestic subsidies granted by the U.S government

D. import quotas imposed by the U.S government

42. Quotas are government-imposed limits on the _________ of goods trade between countries?
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A. quantity

B. costs

C. prices

D. revenue

43. A _______ allows a specified number of goods to be imported each year, and it not specifies from where the product is shipped and who is permitted to import ?
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A. global quota

B. export quota

C. import quota

D. selective quota
44. During periods of growing domestic demand, an import quota ?
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A. is less restrictive on a countrys imports than a tariff

B. Is more restrictive on a countrys imports than a tariff

C. has the same restrictive effect on a countrys imports as a tariff

D. will always generate increased tax revenue for the government

45. The firm would maximize profit by selling computers in the United States at a price of __________ and _________ computers in Japan at a price of __________?
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A. 300, $1,800, 400 $800

B. 300, $1,800, 800 $800

C. 200, $2,000, 100 $1,000

D. 500, $1,400, 400 $800
46. A tariff-rate quota is essentially a ?
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A. two tier quota applied to a countys exports

B. three tier quota applied to a countrys exports

C. two tier tariff applied to a countrys imports

D. three-tier tariff applied to a countrys imports

47. Throughout the world, governments tend to auction quota licenses to their highest bidder ?
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A. often

B. seldom

C. always

D. never