Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

econ > Chapter 9 > Flashcards

Chapter 9 Flashcards

1
Q
  1. One of the reasons that protectionists and government officials may favor using a quota instead of a tariff is:
    a. quotas generate more revenue for the government than tariffs.
    b. quotas ensure that the quantities of imports are strictly limited.
    c. quotas create less market distortions than tariffs.
    d. quotas give less power to politicians than tariffs.
A

B

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q
  1. Which of the following is true of a quota:
    a. Imposition of a quota causes domestic prices to fall below world prices.
    b. Imposition of a quota by a country causes the world price of the good imported by this country to rise.
    c. A quota is a quantitative restriction on imports.
    d. A quota is always more efficient than a tariff.
A

C

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q
  1. With a voluntary export restraint (VER), the economic rent created for the quantitatively limited on trade is collected by:
    a. the government of the importing county.
    b. the consumers in the importing country.
    c. the producers in the importing country.
    d. the exporting firms in the foreign countries
A

D. The economic rent is the extra money because of the scarcity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q
  1. Which of the following NTBs may generate revenue for the government?
    a. Government procurement
    b. Voluntary export restraint
    c. Import quota
    d. Domestic content requirement
A

C. through license

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is the definition of a quota in international trade?
a) A tax imposed by an importing country on imported goods
b) A subsidy provided by an exporting country to its domestic producers
c) A quantitative limit imposed by an importing country on how many of a product can be imported
d) An agreement between two countries to eliminate all trade barriers

A

C

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is the primary similarity between the effects of a quota and a tariff?
a) Both increase domestic production
b) Both decrease government revenue
c) Both decrease consumer surplus
d) Both affect prices, production, trade, and sales of a product

A

D

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

In which scenario might a large country be able to gain from a quota?
a) When world prices rise, and domestic prices remain constant
b) When world prices rise, and domestic prices fall
c) When world prices fall, and domestic prices rise
d) When world prices fall, and domestic prices remain constant

A

C

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

How does a government generate revenue from a quota?
a) By imposing fines on importers who exceed the quota limit
b) By selling quota licenses to importers
c) By providing subsidies to domestic producers
d) By taxing domestic producers who export beyond the quota limit

A

B

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is the primary concern regarding the administration of quotas and import licenses?
a) Ensuring fair competition among importing companies
b) Determining the market demand for imported goods
c) Maximizing government revenue from import licenses
d) Allocating gains from trade among importing companies

A

D.since administration determines who receives gains from trade

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Under fixed favoritism, how are importing companies typically granted import licenses?
a) Based on the current market demand for imported goods
b) Through competitive bidding processes
c) Based on past import market share
d) Through random selection via lotteries

A

C

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

How does fixed favoritism affect government revenue?
a) It maximizes government revenue from import licenses
b) It generates revenue through competitive bidding processes
c) It does not generate revenue for the government
d) It relies on taxes imposed on imported goods for revenue

A

C

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What happens to disputed surplus under fixed favoritism?
a) It is distributed among all importing companies
b) It is retained by the government
c) It goes to importing companies that receive licenses

A

C

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What distinguishes fixed favoritism from other methods of allocating import licenses?
a) It relies on government subsidies for imports
b) It involves competition among importing companies
c) It allocates licenses based on past performance rather than competition

A

C

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q
  1. Which of the following is a means of allocating import licenses by assigning the licenses without competition, applications, or negotiation?
    a. Fixed favoritism
    b. Resource-using application procedures
    c. Import-license auctions
    d. Domestic content requirements
A

A

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is the primary characteristic of import license auctions?
a) Import licenses are allocated based on past performance
b) Importing companies negotiate directly with the government
c) Companies bid to obtain import licenses

A

C

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

How does the government benefit from import license auctions?
a) By distributing disputed surplus among importing companies
b) Through increased competition among importing companies
c) By receiving license auction funds as tax revenue

A

C

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

In a competitive market, what are firms willing to pay for in import license auctions?
a) The difference between domestic price with the quota and the world price
b) The difference between domestic price with the quota and the import share
c) The difference between domestic price without the quota and the world price

A

A

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What role does competition play in import license auctions?
a) It decreases the value of import licenses
b) It increases the likelihood of government intervention
c) It drives firms to bid higher for import licenses

A

C

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

How does corruption in the context of import licenses differ from import license auctions?
a) Companies bid for licenses in import license auctions, while officials accept bribes in corruption cases
b) Corruption involves direct negotiations between companies and officials, while auctions involve competitive bidding
c) Corruption leads to lower tax revenue for the government, while auctions generate tax revenue

A

B

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What do corrupt officials gain in exchange for granting import licenses?
a) Increased competition among importing companies
b) Financial rewards in the form of bribes
c) Public recognition for their contributions to trade

A

B

21
Q

What characterizes resource-using procedures in the allocation of import licenses?
a) Importing companies compete through bidding
b) Importing companies must demonstrate need
c) Importing companies negotiate directly with the government
d) Importing companies are nominated by exporting countries

A

D

22
Q

Which method is associated with resource-using procedures where import licenses are allocated based on the order of application?
a) First-come, first-serve
b) Demonstrating need
c) Negotiations with importing government
d) Nominations by exporting countries
e) All

A

E

23
Q

How do resource-using procedures impact the overall gains from trade?
a) They increase overall gains from trade by promoting competition
b) They have no impact on overall gains from trade
c) They cause total gains from trade to fall due to wasteful allocation

A

C

24
Q

What is a drawback of resource-using procedures in the allocation of import licenses?
a) They reduce costs for importing companies
b) They increase overall efficiency of the import process
c) They use up the resources of importers without adding to production or gains from trade

A

C

25
Q

What is cited as one main advantage of a quota over a tariff?
a) Quotas generate revenue for the government
b) Quotas more precisely limit competition from foreign products
c) Quotas increase efficiency in domestic production

A

B

26
Q

What is one disadvantage of a quota compared to a tariff?
a) Quotas lead to lower consumer prices for imported goods
b) Quotas do not limit competition from foreign products effectively
c) Quotas may not raise revenue for the government, depending on administration

A

C

27
Q

What aspect of quota administration impacts its potential to generate revenue?
a) The level of competition from foreign products
b) The method of allocation of import licenses
c) The negotiation of trade agreements with exporting countries

A

B

28
Q
  1. With a voluntary export restraint (VER), the economic rent created for the quantitatively limited on trade is collected by:
    a. the government of the importing county.
    b. the consumers in the importing country.
    c. the producers in the importing country.
    d. the exporting firms in the foreign countries
A

D

29
Q

What is the definition of a voluntary export restraint (VER)?
a) A limit imposed by an importing country on how many of a product can be imported
b) A limit imposed by an exporting country on how many of a product can be exported
c) An agreement between exporting countries to lower tariffs on imported goods

A

B

30
Q

How do the traditional economic effects of a voluntary export restraint compare to quotas?
a) They have opposite effects on domestic prices
b) They have similar effects on domestic prices
c) They have opposite effects on export prices

A

B

31
Q

Why do exporting companies benefit more from a voluntary export restraint compared to quotas?
a) Because they can export more products
b) Because they can sell their products at higher prices
c) Because they pay lower taxes on exports

A

B

32
Q

Who captures the gains from the higher prices in the importing country under a voluntary export restraint?
a) Importing country’s government
b) Exporting country’s government
c) Exporting country’s producers

A

C

33
Q

How does a voluntary export restraint impact tax revenue for importing governments?
a) It increases tax revenue
b) It decreases tax revenue
c) It does not generate tax revenue

A

C

34
Q

What is the definition of a tariff rate quota (TRQ)?
a) A limit imposed by an importing country on how many of a product can be imported
b) A two-tiered tariff where a small tariff is imposed on cumulative imports up to a threshold quantity
c) An agreement between exporting countries to lower tariffs on imported goods

A

B

35
Q

How does a tariff rate quota typically function?
a) It imposes the same tariff rate on all imported goods
b) It imposes a small tariff on imports up to a certain quantity, with a much higher tariff on imports above that quantity
c) It imposes a higher tariff on imports up to a certain quantity, with a lower tariff on imports above that quantity

A

B

36
Q

What is the current trend regarding traditional quotas compared to tariff rate quotas?
a) Traditional quotas are becoming more common due to their simplicity
b) Traditional quotas are being replaced by more flexible and negotiable tariff rate quotas
c) Both traditional quotas and tariff rate quotas are being phased out globally

A

C

37
Q

What advantage do tariff rate quotas offer over traditional quotas?
a) They impose lower tariffs on all imported goods
b) They are more rigid and less adaptable to changing market conditions
c) They provide flexibility and are easier to negotiate

A

C

38
Q

Which of the following is an example of a nontariff barrier to trade?
a) Import taxes
b) Product standards
c) Export subsidies
d) Quotas

A

B

39
Q

What does a ban on products that do not meet product standard requirements represent?
a) Domestic content requirements
b) Mixing requirements
c) Government procurement restrictions
d) Product standards

A

D

40
Q

Which nontariff barrier requires a certain percentage of the content of imported products to be produced in the importing country?
a) Product standards
b) Domestic content requirements
c) Mixing requirements
d) Government procurement restriction

A

B

41
Q

Businesses being mandated to purchase a certain amount of what they sell domestically is an example of:
a) Product standards
b) Domestic content requirements
c) Mixing requirements
d) Government procurement restriction

A

C

42
Q

In which nontariff barrier scenario would governments be inclined to prefer buying from domestic producers over imported products and materials?
a) Legal classification of products
b) Domestic content requirements
c) Government procurement restrictions
d) Mixing requirements

A

C

43
Q

How do legal rulings on product classification affect trade?
a) They determine import taxes.
b) They affect the size of tariffs.
c) They can influence whether products can be traded at all.
d) They enforce product standards.

A

B

44
Q

In comparison to tariffs, how do some nontariff barriers affect the certainty of limiting imports?
a) They provide less certainty.
b) They provide the same level of certainty.
c) They provide more certainty.
d) They have no impact on certainty.

A

B

45
Q

What is a primary activity during rounds of negotiation under GATT/WTO?
a) Implementing trade sanctions
b) Establishing new member criteria
c) Bargaining for lower tariffs and nontariff barriers
d) Allocating development aid

A

C

46
Q

Which aspect did early rounds of negotiation under GATT primarily focus on?
a) Lowering agricultural tariffs
b) Addressing nontariff barriers
c) Negotiating trade in services
d) Lowering manufacturing tariff

A

A

47
Q

What was a significant focus of later rounds of negotiation under GATT/WTO?
a) Lowering manufacturing tariffs
b) Addressing nontariff barriers
c) Allocating development aid
d) Reducing trade in services

A

B

48
Q
A

econ (12 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions