Below are 11 mcqs (each ques has 4 options)

Please answer all

QUESTION 1

1. If country A is too small to influence the world price then the optimal tariff should be

zero

greater than zero

10%

all of the above.

QUESTION 2

1. Subsidies have:

only production deadweight cost.

only consumption deadweight cost because consumers can buy the goods from the world market at the world price.

production and consumption costs

no welfare impact.

QUESTION 3

1. Quotas on manufactured products are outlawed by GATT perhaps because

they are more restrictive than tariffs.

they are less restrictive than tariffs.

developing countries export agricultural goods.

all of the above

QUESTION 4

1. A tariff can _________ raise a country's welfare

never.

sometimes.

always.

for a small country.

QUESTION 5

1. The United States imposes tariffs

only on imports

only on exports

on both imports and exports

on imports, exports and nontraded goods

QUESTION 6

1. Ad valorem tariffs are collected as:

fixed amounts of money per unit traded.

a percentage of the price of the product.

a percentage of the quantity of imports.

all of the above.

QUESTION 7

1. The simultaneous export and import of airplanes by the United States is an example of

increasing returns to scale

imperfect competition

intra-industry trade

none of the above

QUESTION 8

1. The reason that a large country may gain in welfare from imposing a tariff on imports is because it can

increase the world's export price.

lower the world's export price.

increase imports.

None of the above.

QUESTION 9

1. Increasing returns to scale give rise to a ---- possibility frontier and lead to --- specialization.

concave, incomplete

convex, incomplete

concave, complete

convex, complete.

QUESTION 10

1. The conditions that enable a large country to impose optimal tariff is (are):

a large consumer of that good in the world market.

supply and demand in the importing country are elastic.

no retaliation from the exporting country.

all of the above.

QUESTION 11

1. What's the maindifferencebetween an FTA and a CU?

Both allow free movements of labor and capital as well as free trade.

Both impose tariffs on member countries.

Both allow (almost) free trade among member countries.

The FTA allows individual member countries to choose their own tariffs against non-member countries, while the CU mandates that all member countries follow a common tariff policy towards non-members.