On what do the welfare effects of a quota largely depend?
Correct answer D. All of the above
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Economics MCQs
Page 13 of Economics multiple-choice questions with answers. Tap an option to check yourself.
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When can the home government capture the revenue effect of an import quota?
Correct answer B. If quota licences are auctioned to the highest-bidding importing company
Which kind of quota is an example where foreigners hold the quota licences?
Correct answer C. Export quota
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Which of the following would NOT be classed as a non-tariff trade barrier?
Correct answer D. Antidumping/countervailing duties applied to imports
In essence, what is a tariff-rate quota?
Correct answer D. A two-tier tariff applied to a country's imports
Which form of dumping is usually linked to a recession or excess inventories in the exporting country?
Correct answer D. Sporadic dumping
What is it called when a firm unloads a temporary build-up of inventory on foreign markets because of unexpected changes in supply and demand at home?
Correct answer D. Sporadic dumping
Which trade barrier shielded US car makers from foreign competition between 1981 and 1984?
Correct answer B. Export quotas imposed by the Japanese government
What do ‘buy national’ policies do?
Correct answer A. Result in government purchase policies favoring domestic over foreign producers
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What is true under a tariff-rate quota?
Correct answer A. The over-quota tariff rate exceeds the within-quota tariff rate
A government permits a set number of goods to be imported each year but does not say where they must come from or who may import them. What is this trade barrier called?
Correct answer B. A global quota
For the American public as a whole, what is the effect of export subsidies paid by foreign governments on goods sold to the United States?
Correct answer B. They help more than they hurt
ABC Co. sells its computers in Japan at a lower price than in its home market. This dumping happens because demand for ABC’s computers in Japan is ____ because ____ are available from other nations?
Correct answer D. More elastic in Japan; more substitutes are available from other nations
What is the effect of foreign government export subsidies on goods in which Pakistan has a comparative disadvantage?
Correct answer A. Lead to increases in Pakistani consumer surplus
What is a limit on the maximum quantity of a foreign-produced good allowed into a country over a given period called?
Correct answer C. Import quota
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Which statement correctly describes a tariff-rate quota?
Correct answer D. It is a two-tier tariff system intended to restrict imports
If the home government subsidises a domestically produced good, how do domestic producers tend to respond?
Correct answer C. Increase their level of production
For years the US government imposed quotas on cheap Middle Eastern oil, raising US consumers’ oil costs by about $3 billion. What was an apparent justification for this policy?
Correct answer A. One should not be too dependent on foreign suppliers of crucial resources
Quotas are government-imposed limits on which aspect of goods traded between countries?
Correct answer C. Quantity
Like import tariffs, what do import quotas usually lead to?
Correct answer A. Higher prices and reduced imports