uestion 1

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Both governments and consumers realize significant gains from tariffs, while
domestic producers typically see a negative effect.

Select one:
True
False

Question 2
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An ad valorem tariff is levied as a fixed charge for each unit of a good imported.

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True
False

Question 3
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Which of the following is NOT one of the seven main instruments of trade policy?

Subsidies

Local Content Requirement

Import Quotas

Quota Rents

Question 4
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What is a government payment to a domestic producer?

Subsidy

Import Quota

Quota

Tariff

Question 5
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By lowering production costs, ________________ help domestic producers in
two ways: competing against foreign firms and gaining export markets.

Boycotts

Administrative Policies

Tariffs

Subsidies

Question 6
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Specific tariffs are

import taxes calculated as a fraction of the value of imported goods.

the same as import quotas.

import taxes calculated based solely on the origin country.

import taxes stated in specific legal statutes.

import taxes calculated as a fixed charge unit for each unit of imported goods.

Question 7
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Ad valorem tariffs are

import taxes calculated as a fixed charge for each unit of imported goods.

import taxes stated in ads in industry publications.

the same as import quotas.

import taxes calculated as a fraction of the value of the imported goods.

import taxes calculated solely on the origin country.

Question 8
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The excess supply curve of a product we (H)import from foreign countries
(F)increases as

excess demand of country H increases.

excess demand of country F increases.

excess supply of country F increases.

excess supply of country H increases.

excess supply of country F decreases.

Question 9
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Consumer surplus is equal to the area under the demand curve below the price.

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True
False

Question 10
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Imposition of tariffs in a small country will result in a decrease in the price in the
foreign market.

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True
False

Question 11
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An increase in the domestic demand will result to an excess demand thus

increasing supply for export.

decreasing demand for import.

decreasing supply for export.

increasing demand for import.

Question 12
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They are the losers for each of the trade policies.

Government

All are losers

Producers

Consumers

Question 13
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It is a regulation that requires a specified fraction of a final good to be produced
domestically.

Local content requirement

Import quota

Tariff

Voluntary export restraint

Question 14
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As price increases, producer's surplus _____.

Increases

Decreases

Stays the same

Fluctuates

Question 15
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A total of 10 barrels of oil will be imported by country A. A specific tariff of $5 is
levied. Compute for the total amount of tariff.
50
Answer:

Question 16
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The revenue from selling imports at high prices goes to quota license holders.

Select one:
True
False

Question 17
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An export subsidy ___ the price in the exporting country, ___ its consumer
surplus and ___ its producer surplus.
raises, decreasing, increasing

lowers, decreasing, increasing

lowers, increasing, decreasing

raises, decreasing, decreasing

Question 18
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Area b and d represents:

producer gain

efficiency loss

government gain

consumer loss

Question 19
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When a quota instead of a tariff is used to restrict imports, the government
receives no revenue.

Select one:
True
False

Question 20
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It refers to the amount that producers gain from sales by computing the
difference in the price received from the minimum price at which they would be
willing to sell.

Efficiency loss

Producers surplus

Terms of trade

Consumers surplus