Reading 16: Trading with the World-LOS b习题精选 benefits, div, class, contrast, voluntary

土豆妮

Session 4: Economics: Economics for Valuation
Reading 16: Trading with the World

LOS b: Compare and contrast tariffs, nontariff barriers, quotas, and voluntary export restraints.

 

 

 

The primary benefits derived from tariffs usually accrue to:

A) domestic suppliers of goods protected by tariffs.

B) foreign producers of goods protected by tariffs.

C) domestic producers of export goods.

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土豆妮

Prior to the beginning of summer, the government of Japan places a 150 percent tariff on imported chain saws. Assume for this example that this tariff has a significant impact on the supply of chain saws. The government’s action:

A) will protect the jobs and high wages of Japanese chain saw industry workers.

B) benefits the Japanese government and domestic producers.

C) is more harmful than if the government had limited the amount of chain saws imported.

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The Japanese government’s action is an example of a tariff. A tariff is a tax imposed on imports and benefits the Japanese government because it collects the tariff. Domestic producers benefit because the reduction in the supply of imported goods means a higher domestic price.

The other choices are incorrect. A tariff is considered less harmful than a quota (an import quantity limitation) because under a quota, the domestic government does not receive any funds as it would under a tariff (the foreign producers receive the revenue transfer). In the long run, trade restrictions do not protect the net number of jobs in the country. The number of jobs protected by import restrictions will be offset by jobs lost in the import/export industry. Import/export firms will be unable to sell the overpriced domestic products abroad or import and sell the lower priced restricted foreign-made product.

土豆妮

Suppose the world price of Mercury tennis shoes is $60, but they sell in the U.S. for $75 due to a $15 import tariff. Who will most likely be negatively affected by the tariff?

A) U.S. Consumers.

B) Producers.

C) Foreign Consumers.

土豆妮

Suppose the world price of Mercury tennis shoes is $60, but they sell in the U.S. for $75 due to a $15 import tariff. Who will most likely be negatively affected by the tariff?

A) U.S. Consumers.

B) Producers.

C) Foreign Consumers.

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Tariffs benefit domestic producers of products because the level of imports will be reduced due to an effective increase in the price of the goods. Consumers in the country lose due to higher prices.

土豆妮

Prior to the beginning of summer, the government of Japan places a 150 percent tariff on imported chain saws. Assume for this example that this tariff has a significant impact on the supply of chain saws. The government’s action:

A) will protect the jobs and high wages of Japanese chain saw industry workers.

B) benefits the Japanese government and domestic producers.

C) is more harmful than if the government had limited the amount of chain saws imported.

土豆妮

Who benefits least from tariffs?

A) Foreign consumers.

B) Domestic producers.

C) Domestic consumers.

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A tax imposed on imports is called a tariff, which benefits domestic producers and domestic governments. Domestic consumers lose through higher prices, less choice of products, and lower quality products.

土豆妮

Who benefits the most from a quota?

A) Foreign consumers.

B) Foreign producers.

C) Domestic producers.

土豆妮

Who benefits the most from a quota?

A) Foreign consumers.

B) Foreign producers.

C) Domestic producers.

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Quotas restrict the supply of imported goods, which increases the price domestically benefiting domestic producers. Some foreign producers also benefit from the higher prices created by the quota if they receive the revenue transfer (due to higher prices received for all goods sold under the import license). However, overall the foreign producers do not sell as much of their product and have lost revenues.