ECO 320 Week 3 Quiz 2 Solution (Latest Update)

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1. The purpose of a protective tariff is: (Points : 1)

to protect domestic consumers from harmful products.
to protect the international laws of commerce.
to protect the foreign country from anti-trust actions.
to protect domestic producers from foreign competition.

 

Question 2. 2. The difference between the price producers are willing to accept for the product
and the price producers actually receive for the product is known as: (Points : 1)

producer surplus.
consumer surplus.
price discrimination.
the firm’s profit.

 

Question 3. 3. A tariff levied as a certain amount per unit imported is known as: (Points : 1)

a specific tariff.
a counter tariff.
a forgone tariff.
F.A.S.

 

Question 4. 4. Ad valorem tariffs are collected as: (Points : 1)

a percentage of the quantity of imports.
fixed amounts of money per unit traded.
a percentage of the price of the product.
a percentage of the transportation costs.

 

Question 5. 5. The difference between the price consumers are willing to pay and the price that
they actually pay is known as: (Points : 1)

producer surplus.
consumer surplus.
price discrimination.
government surplus.

 

Question 6. 6. When a quota is imposed: (Points : 1)

foreign firms may gain by selling the imported product at a higher price.
foreign firms may lose by selling fewer imports.
domestic firms lose by selling fewer products.
both a and b

 

Question 7. 7. The Buy American Act of 1933 gives American suppliers a _____ percent margin
of preference over foreign suppliers and a _____ percent margin of preference for
military or defense related goods. (Points : 1)

6; 10
5; 20
6; 50
10; 20

 

Question 8. 8. Which of the following countries has a quota on imports of sugar? (Points : 1)

Germany
Mexico
The U.S.
The Dominican Republic

 

Question 9. 9. A VER is: (Points : 1)

a tariff that is imposed by the exporting country.
a tariff that is imposed by an importing country.
a voluntary quota imposed by the importing country.
a voluntary quota imposed by the exporting country.

 

Question 10. 10. Which of the following describes the use of government policy to enhance exports
in specific industries? (Points : 1)

VER
AVE
Strategic trade policy
NTB

 

Question 11. 11. Which of the following is not a type of dumping? (Points : 1)

sporadic dumping
predatory dumping
complex dumping
persistent dumping

 

Question 12. 12. The activity of a group that seeks to gain from changes in government policy is
known as: (Points : 1)

public policy.
directly productive activities.
rentseeking.
broad focus tariff policy.

 

Question 13. 13. The theory of public choice is based on the premise that: (Points : 1)

politicians attempt to maximize their utility.
politicians attempt to maximize the country's utility.
politicians attempt to keep neutral on unpopular subjects.
politicians attempt to minimize their utility.

 

Question 14. 14. Which of the following statements is false? (Points : 1)

The Tariff of Abominations of 1828 led to a large increase in the U.S. tariff.
Tariffs were increased in the 1860s to help the government pay for the Civil War.
Before the Civil War tariff policy was a source of friction between the Northern and Southern parts of the U.S.
The Smoot-Hawley Tariff of 1930 led to a large reduction in the U.S. tariff.

 

Question 15. 15. The Tariff of Abominations: (Points : 1)

led to the Revolutionary War.
led to World War I.
led to a large increase in U.S. tariffs in 1828.
led to a large increase in U.S. tariffs in 1930.

 

Question 16. 16. The U.K. joins the EU and imports wheat from France rather than from Canada
and/or the U.S. This is an example of: (Points : 1)

trade creation.
trade diversion.
trade modification.
trade deflection.

 

Question 17. 17. A significant feature of a customs union is: (Points : 1)

that agricultural products are always excluded.
that corporate tax rates are always made common.
that the only WTO legal customs union is the EU.
a common external tariff.

 

Question 18. 18. The least integrated category of economic integration is: (Points : 1)

a common market.
a free-trade area.
an economic union.
a customs union.

 

Question 19. 19. Which of the following is not a level of economic integration between countries? (Points : 1)

A free-trade area
A customs union
A common union
An economic union

 

Question 20. 20. When preferential trade agreements are formed, the result is often a reduction of
trade with countries that are not members of the group. Such a result is known as: (Points : 1)

reciprocity.
trade creation.
purchasing power parity.
trade diversion.

 

 

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