Question

QUESTION 9

Import bans, import quotas, voluntary export restraints, and tariffs on goods all

	A.	increase equilibrium quantities, but decrease prices.
	B.	increase equilibrium quantity and prices.
	C.	decrease equilibrium quantity and prices.
	D.	decrease equilibrium quantities, but increase prices.

4 points   

QUESTION 10

Which of the following situations will arise in the domestic market following the imposition of a tariff?

	A.	imports increase, domestic production increases, prices increase
	B.	imports decrease, domestic production increases, prices increase
	C.	imports increase, domestic production decreases, prices decrease
	D.	imports decrease, domestic production increases, prices decrease

4 points   

QUESTION 11

Which of the following situations will arise in the domestic market following the removal of an import quota?

	A.	imports decrease, domestic production increases, prices decrease
	B.	imports increase, domestic production decreases, prices decrease
	C.	imports decrease, domestic production decreases, prices increase
	D.	imports increase, domestic production increases, prices increase

4 points   

QUESTION 12

Which of the following tariffs resulted in worldwide retaliation against the United States during the Great Depression?

	A.	the Smoot-Hawley tariff
	B.	the Chicken tariff
	C.	the Pasta Tariff
	D.	the Tariff of Abominations

Answer 1

9. B) increase equilibrium quantity and prices.

Import quota, bans increase price of goods and equilibrium quantity.

10. B) imports decrease, domestic production increases, prices increase

Tariff is tax on imports. Tariff increases price of goods imported so imports falls, production of goods domestically increases.

11. B) imports increase, domestic production decreases, prices decrease

Removal of quota increases imports because domestic consumers purchase more foreign goods. Domestic production falls when goods from foreign country increases. Price will decrease with removal of quota.

12. A) the Smoot-Hawley tariff

This is the tariff imposed by the US government to protect US businesses at the time of Great Depression.