Quiz 4 - Final ECO 4451

1. When a nation imports materials and other inputs for production duty free, its tariff policy generally results in

• an effective tariff rate less than the nominal tariff rate.

  
  

• a nominal tariff rate less than the effective tariff rate.

  
  

• a rise in both nominal and effective tariff rates.

  
  

• a fall in both nominal and effective tariff rates.

  
  

1. A small nation places a tariff of $1000.00 on automobiles. If 40 autos are imported, the government collects $40,000 in duties. This is a calculation of the

• redistributive effect.

  
  

• protective effect.

  
  

• revenue effect.

  
  

• consumption effect.

  
  

1. The primary benefit of tariff protection goes to

• domestic consumers of the good produced.

  
  

• domestic producers of the good produced.

  
  

• foreign producers of the good produced.

  
  

• foreign consumers of the good produced.

  
  

1. Suppose that the United States eliminates its tariff on steel imports, permitting foreign-produced steel to enter the U.S. market. Steel prices to U.S. consumers would be expected to

• increase, and the foreign demand for U.S. exports would increase.

  
  

• decrease, and the foreign demand for U.S. exports would increase.

  
  

• increase, and the foreign demand for U.S. exports would decrease.

  
  

• decrease, and the foreign demand for U.S. exports would decrease.

  
  

1. The redistributive effect of an import tariff is the transfer of income from the domestic

• producers to domestic buyers of the good.

  
  

• buyers to domestic producers of the good.

  
  

• buyers to the domestic government.

  
  

• government to the domestic buyers

  
  

1. Which of the following is NOT a rationale for tariffs?

• They improve the terms of trade for small and large nations.

  
  

• They protect jobs and reduce unemployment.

  
  

• They promote growth and development of young industries.

  
  

• They promote a level playing field in terms of trade.

  
  

1. A tax of 20 cents per unit of imported cheese would be an example of a(n)

• compound tariff.

  
  

• effective tariff.

  
  

• ad valorem tariff.

  
  

• specific tariff.

  
  

1. An optimum tariff benefits

• the importing nation.

  
  

• exporting nations.

  
  

• the world economy.

  
  

• smaller nations.

  
  

1. Which of the following is a fixed percentage of the value of an imported product as it enters the country?

• specific tariff

  
  

• ad valorem tariff

  
  

• nominal tariff

  
  

• effective tariff