1. If the consumption effect of a tariff were 50 units and the production effect of a tariff were 40 units, then imports woulda) Increase by 10 units.b) Increase by 90 units.c) Decrease by 90 units.d) Decrease by 10 units. 2. If a tariff in a small country produces a deadweight loss of $60, reduces consumer surplus by $200, and increases producer surplus by $40, which of the following is correct?a) National welfare falls by $220.b) National welfare falls by $160.c) Tariff revenues equal $100.d) The price of the imported good must have fallen. 3. Which of the following must be true if a large nation imposes a tariff on an imported good?a) The price received by domestic producers will fall.b) The price received by foreign producers will fall.c) Domestic consumers will gain.d) The nation will gain. 4. A large nation imposes a tariff on an imported good, which causes the world price to fall by $4. At the new world price the large nation has deadweight losses of $500 and imports of 300. Which of the following must be true?a) The large nation has gained.b) Domestic producer surplus has fallen.c) Domestic consumer surplus has increased.d) Total tariff revenues must be less than the deadweight loss. 5. If a tariff of $10 per unit reduces the world price by $4, thena) The nation imposing the tariff must be a small nation.b) Domestic consumers pay $6 of the $10 per unit tariff.c) Foreign producers pay $6 per unit of the $10 per unit tariff.d) The nation imposing the tariff must necessarily lose. 6. Given that the imposition of a tariff will improve the welfare of a large nation, which of the following is true?a) World welfare will increase if all large nations impose the tariff.b) The large nation’s gains are equal to its trading partners’ losses.c) World welfare will fall.d) Large nations should impose a prohibitive tariff. 7. If a nation imposes a tariff on laptop screen, an important input in the production of laptops thena) The nominal tariff on laptops will increase.b) The rate of effective protection on computer screen will decrease.c) The rate of effective protection on laptops will decrease.d) Employment in the laptop producing industry will increase.
This question was answered on: May 23, 2022
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