Question

If a tariff in a small country reduces consumer surplus by $100, increases tariff revenue by...

If a tariff in a small country reduces consumer surplus by $100, increases tariff revenue by $50, and increases producer surplus by $20, then which of the following is incorrect?
a. National welfare falls by $30.
b. National welfare falls by $50.
c. Deadweight loss is $30.
d. The protection cost is $30.

If a tariff of $10 per unit reduces the world price by $4, then
a. The nation imposing the tariff must be a small nation.
b. Domestic consumers pay $6 of the $10 per unit tariff.
c. Foreign producers pay $6 per unit of the $10 per unit tariff.
d. The nation imposing the tariff as a whole must necessarily lose

Given that a tariff will improve the welfare of a large nation, which of the following is true?
a. World welfare will increase.
b. The large nation's gains are equal to its trading partners' losses.
c. World welfare will fall.
d. Large nations should impose a prohibitive tariff

A quota is more restrictive than a tariff because
a. the quota may not have revenue effect.
b. imports under a quota will be less than those under a tariff as the domestic demand increases
c. domestic producers prefer tariffs.
d. domestic consumers prefer quotas.

An increase in the demand of the imported commodity subject to a given import quota:
a. reduces the domestic quantity demanded of the commodity
b. increases the domestic production of the commodity
c. reduces the domestic price of the commodity
d. reduces the producers' surplus

Trade protection in Chinais usually provided to
a. capital-intensive industries
b. technology-intensive industries.
c. high-technology industries
d. all of the above

Trade protectionin developed countries is usually provided to
a. labor-intensive industries
b. capital-intensive industries
c. skilled workers
d. technology-intensive industries

Those who gain from imports do not lobby government for free trade while those who lose from imports tend do lobby for protection because
a. The gains are very widely distributed while the losses are concentrated.
b. The gains are small relative to losses.
c. Both the gains and losses are concentrated.
d. The gains are apparent while the losses are less obvious.

Homework Answers

Answer #1

1) Option B because welfare is decreased by 100 and increased by (20 + 50) = 70 so net welfare loss is -100+70 = -30. This is also the deadweight loss due to tariff

2) Option B because world price is reduced by $4 and domestic price is increased by $6 so that tariff is shared. This generally happens when the country is large.

3) a. World welfare will increase.

4) a. the quota may not have revenue effect.

5) b. increases the domestic production of the commodity

6) d. all of the above

7) a. labor-intensive industries

8) a. The gains are very widely distributed while the losses are concentrated.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1) How might an export tariff in a large country improve the country's economic welfare? Group...
1) How might an export tariff in a large country improve the country's economic welfare? Group of answer choices a) The export tariff will never improve the country's welfare, since deadweight consumption and production losses always outweigh terms of trade gains. b) The export tariff will always improve the country's welfare, since there are no deadweight consumption and production losses. c) The export tariff will improve the country's welfare if deadweight consumption and production losses are greater than terms of...
A- What is the production effect of a tariff? How would you describe it in words,...
A- What is the production effect of a tariff? How would you describe it in words, without reference to any diagram or numbers? How would you show it on a diagram, and how would you compute its value? B- How are trade creation and trade diversion defined, and what roles do they play in the world gains and losses from a trade bloc? C- A small price-taking nation imports a good that it could not possibly produce itself at any...
Which of the following statements are correct for the effect of an import tariff on a...
Which of the following statements are correct for the effect of an import tariff on a small nation? Select one or more: a. In general, an import tariff reduces the national welfare of a small importing nation because the gain in producer surplus is smaller than the loss in consumer surplus. b. The import tariff raises government revenue. c. In general, an import tariff increases the national welfare of the small importing nation because the tariff raises the government revenue....
When studying the effects of trade restrictions, what is the defining characteristic of a “small nation”...
When studying the effects of trade restrictions, what is the defining characteristic of a “small nation” relative to a “large nation”? A small nation has lower per capita income than a large nation. A small nation has less land mass than a large nation. The trade policies of a small nation cannot influence the world prices of its imports and exports while the trade policies of a large nation can. all of the above When a large nation imposes an...
Tariffs and Quotas      Small Country      A. Effects of tariffs on         - Domestic Price...
Tariffs and Quotas      Small Country      A. Effects of tariffs on         - Domestic Price         - Domestic production         - Imports         - Consumer and producer surplus         - Production and consumption distortion         - Government revenue      B. Quotas         - Effect on export supply and domestic price         - Effects on consumer and producer surplus,           production and consumption distortion         - The quota rent         - Methods of allocating the quota rent      C. Large...
Aoslia is a small country that takes the world price of corn as given. Its domestic...
Aoslia is a small country that takes the world price of corn as given. Its domestic supply and demand for corn is given by the following: D = 45 - 3P and S = 3P - 9. Suppose the Aoslian government applies an import quota that limits imports to 12 bushels. Assume the world price is $5. A) Determine the quantity demanded, quantity supplied, and new domestic price with the quota B) Calculate the quota rent C) Assuming that the...
1. Acirema is a small country with respect to the world market for mineral water, and...
1. Acirema is a small country with respect to the world market for mineral water, and imports mineral water. The government decides to impose an import quota on mineral water imports. a) Under what conditions would the net welfare effect of the import quota be positive? b) in trade, what does it mean to be a small country? c) if demand for mineral water is expected to increase, would consumers in Acirema prefer a tariff or an equivalent quota? Why?
1. tariff that has the effect of limiting imports into a small country results in: A....
1. tariff that has the effect of limiting imports into a small country results in: A. a net loss to the exporting country but a net gain for the world. B. a net gain for the importing country and the world. C. no overall change in consumption or the world price of the product that is the subject of the tariff. D. a net loss to the importing country and the world. 2. Tariffs make imports ____________________ in domestic markets...
Consider the case where the large nation Country 2 imports Good Z and decides to eliminate...
Consider the case where the large nation Country 2 imports Good Z and decides to eliminate its import tariff on Good Z. Suppose there is just one foreign exporter of Good Z, Country 3. (You don’t need to draw graphs for this problem.) When Country 2’s tariff is eliminated, (a) what happens to the price for the foreign sellers of Good Z? (b) what happens to the tax burden on Country 3’s producers caused by Country 2’s tariff? (c) what...
QUESTION 31 A benefit of being in a customs union is,   a. a customs union tends...
QUESTION 31 A benefit of being in a customs union is,   a. a customs union tends to have more bargaining power in trade agreements than a country has by itself b. a customs union can accelerate the speed of technical advance c. both A and B d. neither A nor B 3 points    QUESTION 32 Which of the following is true regarding trade protectionism? a. intraindustry trade tends to cause more protectionist pressure than interindustry trade b. particular industries...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT