econ 461 test 1

Topics: Foreign exchange market, Exchange rate, Inflation Pages: 64 (3530 words) Published: June 2, 2014
Econ 461
International Trade
Spring Quarter
Prof. Giorgio Canarella

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Answer the question(s) below based upon the following diagram.

1)

Refer to the figure above. With free trade, the total quantity of imports would equal

1)

__d____
A)

30,000 units.

B)

10,000 units.

C)

22,000 units.

D)

20,000 units.

2)

Refer to the figure above. With free trade, the total value of imports would equal

2)

__b_____
A)

$300,000.

B)

$200,000

C)

$10.

D)

$100,000.

3)

Refer to the figure above. With the tariff, the quantity of imports falls to

3)

____a___
A)

10,000 units.

B)

22,000 units.

C)

12,000 units.

D)

14,000 units.

4)

Refer to the figure above. With the tariff, the government collects

4)

__c_____
A)

$100,000.

B)

$60,000.

C)

$50,000.

D)

$220,000.

5)

Refer to the figure above. The deadweight cost of the tariff equals

5)

__b_____
A)

$25,000.
B)

$50,000.
C)

$10,000.
D)

cannot be calculated without further information.

6)

Refer to the figure above. Domestic producers gain ________ because of the tariff.

6)

____a___
A)

$55,000

B)

$150,000

C)

$15

D)

$120,000

7)

Refer to the figure above. A tariff of ________ would be prohibitive.

7)

____b___
A)

$0

B)

$10

C)

$5

D)

$8

8)

The United States charges

8)

_d______
A)

the same tariff rates on goods from all countries.
B)

lower tariff rates on goods from countries with most favored nation status. C)

low or zero tariffs on goods from certain developing countries. D)

Both B and C.

9)

Tariff levels in developing countries tend to be ________ tariff levels in developed countries.

9)

___a____
A)

higher than

B)

lower than
C)

about equal to

D)

there is no general pattern

10)

Quotas are government imposed limits on the ________ of goods traded between countries.

10)

__d____
A)

prices

B)

quantity

C)

value

D)

Either B or C

11)

Like tariffs, quotas tend to lead to

11)

_d_____
A)

increased consumer surplus.

B)

increased government revenue.
C)

higher prices and reduced imports.

D)

All of the above.

12)

Which of the following is a valid argument for protection?

12)

__b____
A)

fair trade

B)

creation of employment
C)

national defense

D)

All of the above

13)

Which of the following is an invalid argument for protection?

13)

___a___
A)

preservation of the home market

B)

infant industry protection
C)

redistribution of income

D)

All of the above

14)

The United States bans most imports from all of the following countries except

14)

___b___
A)

Cuba.

B)

China.

C)

North Korea.

D)

Iran.

15)

Quotas that entirely eliminate trade in a certain product or a number of products are known as

15)

___b___
A)

ultimate tariffs.

B)

embargoes.

C)

export tariffs.

D)

deadweight.
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