1 The specification of a maximum amount of a commodity or product which may be i

Question

1 The specification of a maximum amount of a commodity or product which may be imported into a country in any period of time is a : a. tariff. b. quota. c. nontariff barrier. d. voluntary export restriction. 2 Restrictions on imports usually lead to a. very little reaction from the trade partners affected by the restriction. b. a general increase in the amount of goods that we may export to other countries. c. a retaliation from the affected trade partners and a lessening of our country's exports. d. a fall in domestic consumer prices on those import-competing goods. 3 Quotas and tariffs both serve the purpose of a. increasing the amount of foreign trade. b. restricting the amount of foreign trade. c. causing domestic producers to lose revenues, d. lowering the prices of imported goods. 4 A tariff is a. a subsidy on domestically produced goods. b. the difference between the world market price and the domestic price when a group of firms in an industry are successful at collusion. c. a tax on imported goods. d. a government restriction on the quantity of a specific god that can be imported into the country and sold. 5 The infant-industry argument for tariffs implies that a. it is unfair to levy tariffs on items intended for use by infants. b. tariffs should be levied in the short-run on foreign products that compete with new domestic industries c. if a newly established domestic industry can survive in the short-run with tariff protection from foreign competition, it would be able to effectively compete in international markets in the long-run without trade protection because of economies of scale. d. if a newly established domestic industry can survive in the short-run, a tariff should be imposed to protect the domestic industry from foreign competition in the long-run. e. permanent tariffs should be levied on foreign products that compete with those produced by newly established domestic industries. 6 A tariff imposed on imported shoes will cause the domestic price of shoes to and the domestic production of shoes to . a. increase, increase. b. increase, decrease, c. decrease, decrease. d. decrease, increase. 7 A tax on an imported product or commodity is a : a. tariff b. export subsidy. c. quota d. import subsidy. 8 If there is no comparative advantage between two countries: a. one country must be more productive at producing all goods than the other. b. the benefits resulting from trade are increased. c. there are no gains from specialization and trade. d. each country should specialize in the production of a particular commodity. 9 A policy of increased exports from the US economy will cause the domestic prices of products to and the domestic production of products to . a. increase, increase. b. increase, decrease. c. decrease, decrease. d. decrease, increase. 10 The North American Free Trade Agreement reduces trade barriers a. among the states of the United States. b. among the provinces of Canada. c. between the United States and Cuba. d. among the United States, Canada, and Mexico.

Explanation / Answer

Hi, Please find the answers as follows: 1) Quota 2) A retaliation from the affected trade partners and a lessening of our country's exports 3) Restricting the amount of foreign trade 4) A tax on imported goods 5) If a newly established domestic industry can survive in the short-run with tariff protection from foreign competition, it would be able to effectively compete in international markets in the long-run without trade protection because of economies of scale 6) Increase, Increase 7) Tariff 8) There are no gains from specialization and trade. 9) Increase, Increase 10) Among the United States, Canada, and Mexico Thanks

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