Quiz on Protectionism

Why might infant industries need protection according to the text?

• They are well-established and competitive

• They are new and not yet established

• They have a strong market presence

• They do not require any government support

What is the effect of a tariff on the supply curve?

• Shifts the supply curve to the right

• Shifts the supply curve to the left

• No effect on the supply curve

• Shifts the demand curve to the right

What is the primary purpose of a quota in international trade?

• To increase domestic supply

• To limit the quantity of imports

• To decrease domestic demand

• To increase foreign competition

What is an embargo in the context of international trade?

• A tax on imports

• A complete ban on trade with a particular country

• A limit on the quantity of goods that can be imported

• A financial aid to domestic producers

Which of the following is a method of protectionism?

• Quota

• VAT

• Product differentiation

• A minimum wage

What term refers to a firm or country selling an export below the cost of production?

• Quotas

• Dumping

• Deregulation

• Tariffs

Which one of the following terms refers to a physical limit on the quantity of imported products allowed into a country?

• Devaluation

• Dumping

• Public good

• Quota

Which one of the following terms refers to a tax on imported goods?

• Subsidy

• Tariff

• Fine

• Pollution permit

What is meant by the term dumping?

• Selling goods in a foreign market at a price below their cost of production

• Importing goods without paying taxes

• Exporting goods at a higher price than the domestic market

• Selling goods only in domestic markets

What is the effect of introducing a tariff on the equilibrium price and quantity of large tyres?

• Equilibrium price increases, equilibrium quantity decreases.

• Equilibrium price decreases, equilibrium quantity increases.

• Equilibrium price and quantity both increase.

• Equilibrium price and quantity both decrease.