Chapter 18 International Trade and Finance

6) Which of the following benefits from a quota or VER?

A) consumers

B) domestic producers

C) the government

D) all of the above

7) A(n) ________ is a tax on an imported good.

A) tariff

B) import quota

C) voluntary export restraint

D) export quota

8) Import bans, import quotas, voluntary export restraints, and tariffs on goods all

A) increase equilibrium quantity and prices.

B) decrease equilibrium quantity and prices.

C) increase equilibrium quantities, but decrease prices.

D) decrease equilibrium quantities, but increase prices.

9) Import bans, import quotas, voluntary export restraints, and tariffs on goods all

A) increase imports and raise prices for consumers.

B) reduce imports and prices for consumers.

C) reduce imports and raise prices for consumers.

D) increase imports and reduce prices for consumers.

10) Which of the following situations will arise in the domestic market following the imposition of a tariff?

A) imports decrease, domestic production increases, prices increase

B) imports increase, domestic production increases, prices increase

C) imports increase, domestic production decreases, prices decrease

D) imports decrease, domestic production increases, prices decrease

11) Which of the following situations will arise in the domestic market following the imposition of an import ban?

A) imports increase, domestic production increases, prices increase

B) imports increase, domestic production decreases, prices decrease

C) imports decrease, domestic production increases, prices increase

D) imports decrease, domestic production increases, prices decrease

12) Which of the following situations will arise in the domestic market following the imposition of an import quota?

A) imports increase, domestic production decreases, prices decrease

B) imports decrease, domestic production increases, prices decrease

C) imports decrease, domestic production decreases, prices increase

D) imports decrease, domestic production increases, prices increase

13) Which of the following situations will arise in the domestic market following the imposition of a voluntary export restraint?

A) imports increase, domestic production increases, prices increase

B) imports decrease, domestic production increases, prices increase

C) imports increase, domestic production decreases, prices decrease

D) imports decrease, domestic production increases, prices decrease

14) Which of the following situations will arise in the domestic market following the removal of an import quota?

A) imports increase, domestic production increases, prices increase

B) imports increase, domestic production decreases, prices decrease

C) imports decrease, domestic production increases, prices decrease

D) imports decrease, domestic production decreases, prices increase

Figure 18.1

15) Refer to Figure 18.1. With free trade, what is the equilibrium quantity of gloves in Duckland?

A) 100

B) 80

C) 60

D) 40