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tariffs MCQs

Practise focused tariffs questions with marked answers for exam preparation and subject revision.

tariffs Mcqs

1. A tariff that prohibits imports has only ?
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A. a revenue effect and redistribution effect

B. consumption effect and protection effect

C. revenue effect and protection effect

D. redistribution effect and consumption effect

2. With free trade the total value of imports would equal ?
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A. $800,000 units

B. $600,000 units

C. $400,000 units

D. $100,000 units

3. If a country an imposes an import tariff, its welfare can improve if ?
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A. Its governments tax revenue increases because of the tariff

B. the country is a small country rather than a larger country

C. its terms of trade improve enough

D. The tariff enhances the welfare of its trading partners

4. With free trade the total quantity of imports would equal ?
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A. 42,000 units

B. 40,000 units

C. 10,000 units

D. 50,000 units

5. If a nation fitting the criteria for the large nation model imposes an import tariff ?
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A. None of the above

B. the domestic price of the product will increase by more than the tariff itself

C. The domestic price of the product will increase by the same amount as the tariff

D. The domestic price of the product will increase by less than the tariff

6. In developed countries, tariffs on raw materials tend to be ?
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A. equal to tariffs on manufactured goods

B. lower than on manufactured goods

C. higher than on manufactured goods

D. highest of all

7. If the world price of steel is $500 a ton a specific tariff $50 is equivalent to an ad valorem tariff of______________?
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A. 5 percent

B. 10 percent

C. 15 percent

D. 20 percent

8. Suppose that Pakistan imposes a tariff on ballpoint pens of 25 rupees per pen plus 12 percent of the pens value, this is an example of a (an) ?
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A. ad valorem tariff

B. specific tariff

C. compound tariff

D. effective tariff

9. Suppose that the offshore assembly provisions (OAP) of the United States are granted to finished computers that are imported and produced domestically This policy will tend to ?
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A. Increase the Production of computers in the United States

B. cause foreign assemblers of computers to use more computer components that are supplied by countries other than the United States

C. Increase the Price of computers to consumers in the United States

D. Increase the production of computer components in the United States

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 ?
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A. 5 percent

B. 10 percent

C. 20 percent

D. 15 percent

11. If I purchase a stereo from South Korea, I obtain the stereo and South Korea obtains the dollars But if I purchase a stereo produced in the Pakistan I obtain the stereo and the rupees remain in Pakistan, This line of reasoning is ?
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A. valid for stereos, but nor for most products imported by Pakistan

B. deceiving since Koreans eventually spend the dollars on Pakistani goods

C. valid for most products imported by Pakistan but not for stereos

D. deceiving since the dollars spent on a stereo built in the Pakistan eventually wind up overseas

12. In todays world, most countries impose tariffs ?
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A. only on imports

B. only on exports

C. on both imports and exports

D. on imports exports and nontraded goods

13. For advanced countries such as the United States, tariffs on imported raw materials tend to be ?
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A. equals to tariffs on imported manufactured goods

B. higher than tariffs on imported manufactured goods

C. The highest of all tariffs

D. lower than tariffs on imported manufactured goods

14. A tax of 20 rupees per unit of imported cheese would be an example of a (an) ?
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A. Compound tariff

B. Effective tariff

C. Ad valorem tariff

D. Specific tariff

15. With the tariff the government collects?
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A. $125,000

B. $150,000

C. $75,000

D. $100,000

16. The difference between what consumers have to pay for a particular and what they are willing to pay is known as ?
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A. consumer surplus

B. producer surplus

C. deadweight surplus

D. deadweight costs

17. According to the _____ argument for protection, tariffs can shield new industries from import competition until they have grown strong and efficient enough to withstand the competition by foreign producers ?
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A. foreign dumping argument

B. beggar they neighbor argument

C. scientific tariff argument

D. infant industry argument

18. If no imported inputs (hard-disk drive) go into the domestic production of a final product (desktop computer) then the ?
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A. None of the above

B. nominal tariff rate on the final product equals the effective tariff rate on the product

C. nominal tariff rate on the final product is greater than the effective rate on the product

D. nominal tariff rate on the final product is less than the effective tariff rate on the final product

19. A tax of 15 percent per imported item would be an example of a (an) ?
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A. Ad valorem tariff

B. Specific tariff

C. Compound tariff

D. Effective tariff

20. The deadweight cost of the tariff equals ?
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A. $25,000

B. $50,000

C. $10,000

D. $75,000

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