Chapter 19

The 'gain' from international trade is:
A. Increased employment in the domestic export sector.
B. Tariff revenue.
C. More goods than would be attainable through domestic production alone.
D. Increased employment in the domestic import sector.

A tariff can best be described as:
A. A law that sets a limited upon the amount of a good that can be imported.
B. A government payment to domestic producers, to enable them to sell competitively in world markets.
C. An excise tax on an exported good.
D. An excise tax on an imported good.

In comparing a tariff and an import quota, we find that:
A. The tariff and quota always generate the same amount of revenue for the Australian government.
B. The tariff generates revenue for the Australian governement, but quota may not.
C. The quota generates revenue for the Australian government, but the tariff does not.
D. Neither the tariff nor the quota generates revenue for the Australian government.

Which of the following is the best description of a quota?
A. A specification of the maximum amount of a product that may be imported during any period of time.
B. Agreements adopted by exporting nations, to limit exports to another country.
C. Regulations and licensing relating to the quality or safety of imported products.
D. An excise tax that is designed to place foreign producers at a competitive disadvantage when selling in domestic markets.

For a product that is imported into a country, a licensing requirement, or unreasonably high standards pertaining to its quality and safety, are examples of:
A. Protective tariffs.
B. Voluntary export restrictions.
C. Quotas on imported products.
D. Non-tariff barriers.

In the long run, tariffs:
A. Discourage imports and exports.
B. Encourage imports but discourage exports.
C. Encourage imports and exports.
D. Discourage imports but encourage exports.

The basic difference in the economic effects of a tariff, compared with a quota, is that a:
A. Quota is more likely to generate revenue for the government.
B. Tariff raises product prices, but a quota does not raise product prices.
C. Quota raises product product prices, but a tariff does not raise product prices.
D. Tariff is more likely to generate revenue for the government.