Which of the following values typically decreases when a small country imposes a tariff on imports of a good?
economics
Description
QUESTION 1
Which of the following values
typically decreases when a small country
imposes a tariff on imports of a good?
|
|
A. |
Producer
Surplus |
|
|
B. |
Government
Revenue |
|
|
C. |
Deadweight
Loss |
|
|
D. |
Consumer
Surplus |
QUESTION 2
We noted during class that a tariff
may cause a welfare increase in a large country. This occurs because in a
large country:
|
|
A. |
the
tariff may not have an effect on consumer surplus. |
|
|
B. |
there
may be a terms of trade gain due to the tariff. |
|
|
C. |
the
tariff may have a larger effect on producer surplus. |
|
|
D. |
there
may be no deadweight loss generated by a tariff. |
QUESTION 3
From the standpoint of
international trade, what is the primary difference between a large country and
a small country?
|
|
A. |
A
large country may affect the world price of a good with its actions, while a
small country will not. |
|
|
B. |
A
large country has a higher GDP than a small country. |
|
|
C. |
A
large country has a greater land area than does a small country. |
|
|
D. |
A
large country has a greater population than does a small country. |
QUESTION 4
When firms in Country A engage
in a “voluntary export restraint” (VER) with respect to their exports to
Country B, who receives the quota rents?
|
|
A. |
The
exporting firms in Country A |
|
|
B. |
The
import-competing firms in Country B |
|
|
C. |
The
government in Country B |
|
|
D. |
The
consumers in Country B |
QUESTION 5
Let’s start this scenario by imagining a small country that
imports widgets from a foreign country. The price of widgets on the world
market is $5. When faced with free trade, producers in the home country
produce 100 widgets and consumers in the home country consume 1000 widgets.
Assume that the home country decides to impose a $5 tariff on
imports of widgets into the country. How many dollars will the domestic
price of widgets increase by?
