國際經(jīng)濟(jì)學(xué)練習(xí)題：ch09

InternationalEconomics,8e(Krugman)Chapter9

ThePoliticalEconomyofTradePolicy9.1

TheCaseforFreeTrade1)

Theefficiencycasemadeforfreetradeisthatastradedistortionssuchastariffsaredismantledandremoved,A)

governmenttariffrevenuewilldecrease,andthereforenationaleconomicwelfarewilldecrease.B)

governmenttariffrevenuewilldecrease,andthereforenationaleconomicwelfarewillincrease.C)

deadweightlossesforproducersandconsumerswilldecrease,henceincreasingnationaleconomicwelfare.D)

deadweightlossesforproducersandconsumerswilldecrease,hencedecreasingnationaleconomicwelfare.E)

Noneoftheabove.Answer:

CQuestionStatus:

PreviousEdition2)

Theopportunitytoexploiteconomiesofscaleisoneofthegainstobemadefromremovingtariffsandothertradedistortions.ThesegainswillbefoundbyadecreaseinA)

worldpricesofimports.B)

theconsumptiondistortionlosstriangle.C)

theproductiondistortionlosstriangle.D)

BothBandC.E)

Noneoftheabove.Answer:

EQuestionStatus:

PreviousEdition3)

Judgingbythechangesintheheightoftariffratesinmajortradingcountries,theworldhasbeenexperiencingagreatA)

tradeliberalization.B)

surgeofprotectionism.C)

lackofprogressinthetrade-policyarea.D)

movetowardsregionalintegration.E)

Noneoftheabove.Answer:

AQuestionStatus:

PreviousEdition4)

TheWorldTradeOrganization(WTO)wasorganizedasasuccessortotheA)

IMF.B)

UN.C)

UNCTAD.D)

GATT.E)

theWorldBank.Answer:

DQuestionStatus:

PreviousEdition5)

TheWTOwasestablishedbythe________ofmultilateraltradenegotiations.A)

KennedyRoundB)

TokyoRoundC)

UruguayRoundD)

DillonRoundE)

Noneoftheabove.Answer:

CQuestionStatus:

PreviousEdition6)

TheSmoot-HawleyTariffActof1930hasgenerallybeenassociatedwithA)

fallingtariffs.B)

freetrade.C)

intensifyingtheworldwidedepression.D)

recoveryfromtheworldwidedepression.E)

non-tariffbarriers.Answer:

CQuestionStatus:

PreviousEdition7)

Atradepolicydesignedtoalleviatesomedomesticeconomicproblembyexportingittoforeigncountriesisknowasa(n)A)

internationaldumpingpolicy.B)

countervailingtariffpolicy.C)

beggarthyneighborpolicy.D)

tradeadjustmentassistancepolicy.E)

Noneoftheabove.Answer:

CQuestionStatus:

PreviousEdition8)

TradetheorysuggeststhatJapanwouldgainfromasubsidytheUnitedStatesprovidesitsgrainfarmersifthegainstoJapaneseconsumersofwheatproductsmorethanoffsetsthelossestoJapanesewheatfarmers.ThiswouldoccuraslongasJapanA)

isanetimporterinbilateraltradeflowswiththeUnitedStates.B)

isanetimporterofwheat.C)

hasacomparativeadvantageinwheat.D)

hasanabsoluteadvantageinproducingwheat.E)

Noneoftheabove.Answer:

BQuestionStatus:

PreviousEdition9)

TheWorldTradeOrganizationprovidesforallofthefollowingexceptA)

theusageofthemostfavorednationclause.B)

assistanceinthesettlementoftradedisagreements.C)

bilateraltariffreductions.D)

multilateraltariffreductions.E)

Noneoftheabove.Answer:

CQuestionStatus:

PreviousEdition10)

Whichorganizationdeterminesproceduresforthesettlementofinternationaltradedisputes?A)

WorldBankB)

WorldTradeOrganizationC)

InternationalMonetaryOrganizationD)

InternationalBankforReconstructionandDevelopmentE)

TheLeagueofNationsAnswer:

BQuestionStatus:

PreviousEdition

11)

TheWTO'sinterventionagainstcleanairstandardsA)

hasearnedituniversalapproval.B)

wasdoneinordertolimitnationalsovereignty.C)

hasresultedinmuchcriticism.D)

hasresultedinmuchcriticismamongprofessionaleconomists.E)

Noneoftheabove.Answer:

CQuestionStatus:

PreviousEdition12)

ItisarguedthattheUnitedStateswouldbefoolishtomaintainafree-tradestanceinaworldinwhichallothercountriesexploitchildorprisonerlabor,orareprotectionist.Ontheotherhand,Ricardo'sclassicdemonstrationofthesourcesandeffectsofcomparativeadvantagecogentlydemonstratesthatregardlessofothercountrypolicy,freetraderemainsthefirstbestpolicyforacountrytofollow,sinceitwillmaximizeitsconsumptionpossibilities(conditionaluponothercountrypolicies).Explain.Discussthecontradictionwiththeargumentintheprecedingparagraph.Answer:

InthecontextoftheRicardianmodel,itistruethatgainsfromtradearestrictlyaresultofworldtermsoftrade,whichdifferfromdomesticmarginalratesofsubstitution.Insuchaworld,thereasonwhyforeigngoodsarecheapisofnoconcerntodomesticconsumers.However,inaworldwhichallowsforlarge-scalelabormigration,ignoringlaborconditionsabroadmayultimatelyresultinlivingstandardsfordomesticworkerstobedraggeddown.QuestionStatus:

PreviousEdition9.2

NationalWelfareArgumentsAgainstFreeTrade1)

TheoptimumtariffisA)

thebesttariffacountrycanobtainviaaWTOnegotiatedroundofcompromises.B)

thetariff,whichmaximizesthetermsoftradegains.C)

thetariff,whichmaximizesthedifferencebetweentermsoftradegainsandtermsoftradeloses.D)

notpracticalforasmallcountryduetothelikelihoodofretaliation.E)

notpracticalforalargecountryduetothelikelihoodofretaliation.Answer:

EQuestionStatus:

PreviousEdition2)

TheoptimumtariffismostlikelytoapplytoA)

asmalltariffimposedbyasmallcountry.B)

asmalltariffimposedbyalargecountry.C)

alargetariffimposedbyasmallcountry.D)

alargetariffimposedbyalargecountry.E)

Noneoftheabove.Answer:

BQuestionStatus:

PreviousEdition3)

TheprohibitivetariffisatariffthatA)

issohighthatiteliminatesimports.B)

issohighthatitcausesundueharmtotrade-partnereconomies.C)

issohighthatitcausesundueharmtoimportcompetingsectors.D)

issolowthatthegovernmentprohibitsitsusesinceitwouldloseanimportantrevenuesource.E)

Noneoftheabove.Answer:

AQuestionStatus:

PreviousEdition

4)

TheexistenceofmarginalsocialbenefitswhicharenotmarginalbenefitsfortheindustryproducingtheimportsubstitutesA)

isanargumentsupportingfreetradeandnon-governmentalinvolvement.B)

isanargumentsupportingtheuseofanoptimumtariff.C)

isanargumentsupportingtheuseofmarketfailuresasatrade-policystrategy.D)

isanargumentrejectingfreetradeandsupportinggovernmentalinvolvement.E)

Noneoftheabove.Answer:

DQuestionStatus:

PreviousEdition5)

ThedomesticmarketfailureargumentisaparticularcaseofthetheoryofA)

theoptimum,orfirst-best.B)

thesecondbest.C)

thethirdbest.D)

thesufficingprinciple.E)

Noneoftheabove.Answer:

BQuestionStatus:

PreviousEdition6)

Thedifficultyofascertainingtherightsecond-besttradepolicytofollowA)

reinforcessupportforthethird-bestpolicyapproach.B)

reinforcessupportforincreasingresearchcapabilitiesofgovernmentagencies.C)

reinforcessupportforabandoningtradepolicyasanoption.D)

reinforcessupportforfree-tradeoptions.E)

Noneoftheabove.Answer:

DQuestionStatus:

PreviousEdition7)

ThereasonprotectionismremainsstrongintheUnitedStatesisthatA)

economistscanproduceanyresulttheyarehiredtoproduce.B)

economistscannotpersuadethegeneralpublicthatfreetradeisbeneficial.C)

economistsdonotreallyunderstandhowtherealworldworks.D)

thelossesassociatedwithprotectionismarediffuse,makinglobbyingbythepublicimpractical.E)

Noneoftheabove.Answer:

DQuestionStatus:

PreviousEdition8)

TheUnitedStatesappearsattimestohaveatotallyschizophrenicattitudetowardprotectionism.TheUnitedStateswasthecountrythatproposedtheestablishmentoftheWorldTradeOrganizationasearlyasthelate1940s,andwasalsotheonlyindustrializedcountrythatrefusedtoratifythisatthattime.TheUnitedStateshasconsistentlyarguedonthesideofmultinationalfreetradeinGATTRounds,andyetmaintainsmanyprotectionistlawssuchasthosewhichreserveoilshipmentsfromAlaskatoU.S.flagcarriers.Howcanyouexplainthisapparentlackofnationalconsistencyonthisissue?Answer:

Thisreflectsthefactthatinternationaltradetypicallyhasmanywinnersandrelativelyfewer,butpoliticallypowerfullosers.Shortofguaranteed(constitutional?)non-conditionalcompensatorymechanisms,thebasicconflictbetweenthesetwogroupswillalwaysbethere.QuestionStatus:

PreviousEditionAssumethatBoeing(U.S.)andAirbus(EuropeanUnion)bothwishtoentertheHungarianmarketwiththenextnewgenerationairliner.Theybothhaveidenticalcostanddemandconditions(asindicatedinthegraphabove).9)

Refertoabovefigure.AssumethatBoeingisthefirsttoentertheHungarianmarket.Withoutagovernmentsubsidywhatpricewouldtheydemand,andwhatwouldbetheirtotalprofits?Answer:

$12Million,$16.QuestionStatus:

PreviousEdition10)

Refertoabovefigure.WhatistheconsumersurplusenjoyedbyHungarianconsumersofBoeingaircraftinthesituation?Answer:

$8Million.QuestionStatus:

PreviousEdition11)

Refertoabovefigure.SupposetheEuropeangovernmentprovidesAirbuswithasubsidyof$4foreachairplanesold,andthatthesubsidyconvincesBoeingtoexittheHungarianmarket.NowAirbuswouldbethemonopolistinthismarket.Whatpricewouldtheycharge,andwhatwouldbetheirtotalprofits?Answer:

$10Million,and$36Million.QuestionStatus:

PreviousEdition12)

Refertoabovefigure.WhatwouldbethecostofthesubsidytoEuropeantaxpayers?Answer:

$24Million.QuestionStatus:

PreviousEdition13)

Refertoabovefigure.WhathappenstotheConsumerSurplusofHungariancustomersasaresultofthissubsidy?Answer:

Anincreaseof$10Million.QuestionStatus:

PreviousEdition14)

Refertoabovefigure.WhatistherevenuegainorlossforEuropeasawhole(includingtaxpayers)?Answer:

Againof$12Million.QuestionStatus:

PreviousEdition

9.3

IncomeDistributionandTradePolicy1)

Itisarguedthatspecialinterestgroupsarelikelytotakeoverandpromoteprotectionistpolicies,whichmayleadtoadecreaseinnationaleconomicwelfare.ThisargumentleadstoA)

apresumptionthatinpracticeafreetradepolicyislikelytobebetterthanalternatives.B)

apresumptionthattradepolicyshouldbeshiftedtoNon-GovernmentalOrganizations,soastolimittaxpayerburden.C)

apresumptionthatfreetradeisgenerallyasecond-bestpolicy,tobeavoidediffeasiblealternativesareavailable.D)

apresumptionthatfreetradeisthelikelyequilibriumsolutionifthegovernmentallowsspecialinterestgroupstodictateitstradepolicy.E)

Noneoftheabove.Answer:

AQuestionStatus:

PreviousEdition2)

TheauthorsofthetextbelievethatA)

second-bestpolicyisworsethanoptimalpolicy.B)

specialinterestgroupsgenerallyenhancenationalwelfare.C)

nationalwelfareislikelytobeenhancedbytheimpositionofanoptimaltariff.D)

marketFailureargumentstendtosupportfree-tradepolicy.E)

thereisnosuchthingasnationalwelfare.Answer:

EQuestionStatus:

PreviousEdition3)

ThemedianvotermodelA)

workswellintheareaoftradepolicy.B)

isnotintuitivelyreasonable.C)

tendstoresultinbiasedtariffrates.D)

doesnotworkwellintheareaoftradepolicy.E)

Noneoftheabove.Answer:

DQuestionStatus:

PreviousEdition4)

Thefactthattradepolicyoftenimposesharmonlargenumbersofpeople,andbenefitsonlyafewmaybeexplainedbyA)

thelackofpoliticalinvolvementofthepublic.B)

thepowerofadvertisement.C)

theproblemofcollectiveaction.D)

thebasicimpossibilityofthedemocraticsystemtoreachafairsolution.E)

Noneoftheabove.Answer:

CQuestionStatus:

PreviousEdition5)

ProtectionismtendstobeconcentratedintwosectorsA)

agricultureandclothing.B)

hightechandnationalsecuritysensitiveindustries.C)

capitalandskillintensiveindustries.D)

industriesconcentratedintheSouthandintheMidwestofthecountry.E)

Noneoftheabove.Answer:

AQuestionStatus:

PreviousEdition

6)

ExportembargoescausegreaterlossestoconsumersurplusinthetargetcountryA)

thelesseritsinitialdependenceonforeignproducedgoods.B)

themoreelasticisthetargetcountry'sdemandschedule.C)

themoreelasticisthetargetcountry'sdomesticsupply.D)

themoreinelasticthetargetcountry'ssupply.E)

Noneoftheabove.Answer:

DQuestionStatus:

PreviousEdition7)

ThestrongestpoliticalpressureforatradepolicythatresultsinhigherprotectionismcomesfromA)

domesticworkerslobbyingforimportrestrictions.B)

domesticworkerslobbyingforexportrestrictions.C)

domesticworkerslobbyingforfreetrade.D)

domesticconsumerslobbyingforexportrestrictions.E)

domesticconsumerslobbyingforimportrestrictions.Answer:

AQuestionStatus:

PreviousEdition8)

TheaveragetariffratetodataondutiableimportsintheUnitedStatesisapproximatelyA)

5%ofthevalueofimports.B)

15%ofthevalueofimports.C)

20%ofthevalueofimports.D)

25%ofthevalueofimports.E)

morethan25%ofthevalueofimports.Answer:

AQuestionStatus:

PreviousEdition9)

In1990theUnitedStatesimposedtradeembargoesonIraq'sinternationaltrade.ThiswouldinducesmallerlossesinIraq'sconsumersurplustheA)

lesselasticIraq'sdemandschedule.B)

moreelasticIraq'sdemandschedule.C)

greaterisIraq'sdependenceonforeignproducts.D)

moreinelasticisIraq'ssupplyschedule.E)

Noneoftheabove.Answer:

BQuestionStatus:

PreviousEdition10)

TodayU.S.protectionismisconcentratedinA)

hightechindustries.B)

labor-intensiveindustries.C)

industriesinwhichJapanhasacomparativeadvantage.D)

computerintensiveindustries.E)

capital-intensiveindustries.Answer:

BQuestionStatus:

PreviousEdition

11)

ThequantitativeimportanceofU.S.protectionofthedomesticclothingindustryisbestexplainedbythefactthatA)

thisindustryisanimportantemployerofhighlyskilledlabor.B)

thisindustryisanimportantemployeroflowskilledlabor.C)

mostoftheexportersofclothingintotheU.S.arepoorcountries.D)

thisindustryisapoliticallywellorganizedsectorintheU.S.E)

Noneoftheabove.Answer:

DQuestionStatus:

PreviousEdition12)

Itmaybedemonstratedthatanyprotectionistpolicy,whicheffectivelyshiftsrealresourcestoimportcompetingindustriesorsectorswillharmexportindustriesorsectors.Thismay,forexample,happenbythestrengtheningU.S.dollarintheforeignexchangemarket.WouldyouproposethereforethatexportindustrieslobbyagainstprotectionisminInternationalTradeCommissionproceedings?Whatofconsumeradvocates?Discusstheprosandtheproblemsofsuchasuggestion.Answer:

Actuallythisisaninterestingidea.ItiswellknownthatthepublicinterestisputonholdastheITCconsidersonlythesqueakywheelsofthoseallegedlyhurtbytrade.While"consumers"maybetooamorphousagrouptosuccessfullyorganizeandpursueapoliticalagenda,theexportersandconsumeradvocatesmaybeabletoformacounterweighttotheimportcompetingindustries.QuestionStatus:

PreviousEdition9.4

InternationalNegotiationsandTradePolicy1)

ThesimplemodelofcompetitionamongpoliticalpartieslongusedbypoliticalscientiststendstoleadtothepracticalsolutionofselectingtheA)

optimaltariff.B)

prohibitivetariff.C)

zero(free-trade)tariff.D)

thetariffratefavoredbythemedianvoter.E)

Noneoftheabove.Answer:

DQuestionStatus:

PreviousEdition2)

TheGeneralAgreementonTariffsandTradeandtheWorldTradeOrganizationhaveresultedinA)

terminationofexportsubsidiesappliedtomanufacturedgoods.B)

terminationofimporttariffsappliedtomanufactures.C)

terminationofimporttariffsappliedtoagriculturalcommodities.D)

terminationofinternationaltheftofcopyrights.E)

Noneoftheabove.Answer:

EQuestionStatus:

PreviousEdition3)

TheGeneralAgreementonTariffsandTradeandtheWorldTradeOrganizationhaveresultedinA)

theestablishmentofuniversaltradeadjustmentassistancepolicies.B)

theestablishmentoftheEuropeanUnion.C)

thereciprocaltradeclause.D)

reductionsintradebarriersviamultilateralnegotiations.E)

Noneoftheabove.Answer:

DQuestionStatus:

PreviousEdition

4)

CountervailingdutiesareintendedtoneutralizeanyunfairadvantagethatforeignexportersmightgainbecauseofforeignA)

tariffs.B)

subsidies.C)

quotas.D)

Local-Contentlegislation.E)

Noneoftheabove.Answer:

BQuestionStatus:

PreviousEdition5)

In1980theUnitedStatesannouncedanembargoongrainexportstotheSovietUnioninresponsetotheSovietinvasionofAfghanistan.ThisembargowasmainlyresistedbyA)

U.S.grainconsumersofbread.B)

U.S.grainproducers.C)

foreigngrainproducers.D)

U.S.communists.E)

Noneoftheabove.Answer:

BQuestionStatus:

PreviousEdition6)

UnderU.S.commercialpolicy,theescapeclauseresultsinA)

temporaryquotasgrantedtofirmsinjuredbyimportcompetition.B)

tariffsthatoffsetexportsubsidiesgrantedtoforeignproducers.C)

arefusaloftheU.S.toextraditeanyonewhoescapedpoliticaloppression.D)

taxadvantagesextendedtominority-ownedexportingfirms.E)

tariffadvantagesextendedtocertainCaribbeancountriesintheU.S.market.Answer:

AQuestionStatus:

PreviousEdition7)

UnderU.S.commercialpolicy,whichclausepermitsthemodificationofatradeliberalizationagreementonatemporarybasisifseriousinjuryoccurstodomesticproducersasaresultoftheagreement?A)

adjustmentassistanceclauseB)

escapeclauseC)

mostfavorednationclauseD)

prohibitivetariffclauseE)

Noneoftheabove.Answer:

BQuestionStatus:

PreviousEdition8)

AnissueneverconfrontedeffectivelybyGATT,butconsideredanimportantissueforWTOisthatofA)

thepromotionoffreerWorldtrade.B)

thepromotionoffreerWorldcommoditytrade.C)

thepromotionoffreerWorldservicestrade.D)

theloweringoftariffrates.E)

Noneoftheabove.Answer:

CQuestionStatus:

PreviousEdition

9)

ThepoliticalwisdomofchoosingatariffacceptabletothemedianU.S.voterisA)

agoodexampleoftheprincipleofthesecondbest.B)

agoodexampleofthewayinwhichactualtariffpoliciesaredetermined.C)

agoodexampleoftheprincipleofpoliticalnegotiation.D)

notevidentinactualtariffdetermination.E)

Noneoftheabove.Answer:

DQuestionStatus:

PreviousEdition10)

Agame-theoryexplanationoftheparadoxthateventhoughallcountrieswouldbenefitifeachchosefreetrade,infacteachtendstofollowprotectionistpoliciesisA)

tradewar.B)

collectiveaction.C)

prisoner'sdilemma.D)

benefit-costanalysis.E)

Noneoftheabove.Answer:

CQuestionStatus:

PreviousEdition11)

WhentheU.S.placedtariffsonFrenchwine,FranceplacedhightariffsonU.S.chickens.ThisisanexampleofA)

deadweightlosses.B)

multilateralnegotiations.C)

bilateraltradenegotiations.D)

internationalmarketfailures.E)

Noneoftheabove.Answer:

EQuestionStatus:

PreviousEdition12)

Presumably,sincetheUnitedStatesisalargecountryinmanyofitsinternationalmarkets,apositiveoptimumtariffexistsforthiscountry.Itfollowsthereforethatwhenanylegislatororgovernmentofficialwhopromoteszero-tarifffreetradepolicies,isbydefinitionnotactinginthepublic'sbestinterest.Discuss.Answer:

Technicallythisistrue.However,thisistrueonlywithinthecontextofagenerallymyopicviewofinternationalrelations.Ifthetariffimposingcountryislargeenoughtomakeasubstantialdifferenceinitswelfarebyseekinganoptimumtariff,thenitcannothopetoremaininvisible,asitspoliciesaresubstantiallyharmingitstradepartners.Foreignrepercussionsarealmostacertainty.Insucha"game"itisnotatallcertainthatseekingtheoptimumtariffdominatesalternativestrategies.QuestionStatus:

PreviousEdition13)

IthasbeenclaimedthatforeigngovernmentshaveattemptedtoinfluencevotesintheU.S.thatwouldpromotepoliciesofprotectionismwithintheU.S.Onthesurfacethisappearstobetotallyillogicalandcounterintuitive,asthiswouldpresumablylessenthepossibilitiesofforeigners'exportstotheU.S.Answer:

Thiswouldmakesenseonlyiftheformofprotectionismisatariff.However,ifitisaquota,thenthescarcityrentsmaybecapturedbyestablishedforeignproducers.Hence,thereactionoftheJapanesetoautomobilequotaswastodramaticallyincreasethehigh-end,highlyprofitableautomobiles.Thiswouldbeevenmoreself-evidentiftheprotectionismtooktheformofaVoluntaryExportRestraint(VER),oradetailedformalizedbilateralcartel,suchastheoldMulti-FibreAgreement.QuestionStatus:

PreviousEdition

14)

TheU.S.producerBoeing,andtheEuropeanAirbusarecontemplatingthenextgenerationmid-sizedfuelefficientgenerationofaircarrier.Ifbothproducetheirrespectivemodels,theneachwouldlose$50million(becausetheworldmarketisjustnotlargeenoughtoenableeithertocapturepotentialscaleeconomiesiftheyhadtosharetheworldmarket).Ifneitherproduce,theneachone'snetgainwouldofcoursebezero.Ifeitheroneproduceswhiletheotherdoesnot,thentheproducerwillgain$500million.(a) Whatisthecorrectstrategyforeithercompany?(b) Whatisthecorrectstrategyforagovernmentseekingtomaximizenationaleconomicwelfare?(c) Ifanationalgovernmentdecidestosubsidizeitsaircraftproducer,howhighshouldbethesubsidy?Answer:

(a) enterthemarketfirst.Thentheothercompanyknowsthatifitalsoenters,itwillnotbeabletocovercosts.(b) Subsidizeitsproducer.Ifthisallowsittoenterfirst,thenwegetthesamesolutionasanswer(a)above.(c) Anyfigureabove$50million(e.g.$55million).Thiswouldpromisepositiveprofitsregardlessofthedecisionofthecompetitor.The"winner"thenmayturnouttobethatcountrywhosevotersareleastsensitivetoon-the-books,transparentsubsidiesgiventorichcorporations(thesesubsidieswillhavetocontinueyearafteryearuntiltheothercountrystopsitssubsidies).QuestionStatus:

PreviousEdition15)

Inrecentcases,theU.S.placedquotasorprotectionisttariffsonimportedsteelandimportedmicrochips.Inbothcasesthedamageto"downstream"industrieswasobvioustoallandrelativelyeasytoquantifyanddemonstrate.AssumingthattheU.S.lawmakersarenotplaindumb,whydidtheyenacttheseprotectionistpolicies?Answer:

Thesystembywhichtheseprotectionistpoliciesaresetintolawisbiasedinfavoroftheproduc