BAIB3004 Week 4 Seminar 24/25

What is a tariff?

• A government subsidy

• A tax on imports

• A limit on export quantities

• A trade agreement between countries

What is a Voluntary Export Restraint (VER)?

• A quota imposed by the importing country

• A self-imposed limit on exports by the exporting country

• A tariff on luxury goods

• A ban on certain imports

Which of the following is a non-tariff barrier to trade?

• Ad valorem tariff

• Import quota

• Excise tax

• Sales tax

How do subsidies generally affect the price of goods in the domestic market?

• Increase prices

• Decrease prices

• Have no effect on prices

• Always lead to price volatility

What is the effective rate of protection?

• The nominal tariff rate

• The percentage increase in value added resulting from the tariff structure

• The total amount of tariff revenue collected

• The percentage of imports subject to tariffs

In the context of trade policy, what does "home demand" refer to?

• The demand for domestically produced goods only

• The total demand in the domestic market, including for imports

• The demand for housing in the domestic market

• The demand for exports in foreign markets

How does an import quota differ from a tariff in terms of government revenue?

• Quotas always generate more revenue than tariffs

• Tariffs generate revenue, while quotas typically do not

• Both generate the same amount of revenue

• Neither generates any government revenue

How does a tariff typically affect consumer surplus in the importing country?

• Increases it

• Decreases it

• Has no effect

• May increase or decrease depending on the good

What is the primary purpose of an import quota?

• To increase government revenue

• To limit the quantity of imported goods

• To promote exports

• To reduce domestic prices

What is the primary goal of a subsidy in the context of trade policy?

• To restrict imports from foreign countries

• To make domestic goods more competitive in international markets

• To increase government revenue

• To reduce the quantity of exports