EC340 Midterm Exam #2
Instructions:
1. Please remember to fill in your name, PID number and section number on the scantron. You do not need to fill in a form number.
2. Non-programmable calculators are allowed. Neither books nor notes are allowed.
3. You need to turn in both the scantron and your exam.
4. There are 40 multiple-choice questions on the exam. Each question is worth 2.5 points.
-------------------------------------------------------------------------------------------------------------1. The United States recently levied tariffs on tires imported from what country?
A) Japan
B) Brazil
C) Russia
D) China
2. Most favored nation status requires:
A) a WTO member that reduces a tariff on imports from one WTO trading…show more content… (Figure: The Import-Competing Industry) In comparison to a no-trade situation, with free trade, producer surplus __________ to _________.
A) increases; $75
B) decreases; $75
C) increases; $150
D) decreases; $150
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17. What is a difference between a tariff imposed by a large country and a tariff imposed by a small country?
A) A tariff imposed by a large country has no consumption losses.
B) A tariff imposed by a large country has a gain from the terms-of-trade effect.
C) A tariff imposed by a small country has a loss from the terms-of-trade effect.
D) A tariff imposed by a large country has a loss from the terms-of-trade effect.
18. When a large country imposes a tariff, the burden is often shared by:
A) foreign consumers and domestic producers.
B) domestic consumers and foreign producers.
C) all producers and consumers in each nation equally.
D) domestic consumers and domestic producers.
19. If a large country imposes a tariff:
A) its economic welfare may increase if its gains from its terms-of-trade effect exceed deadweight losses.
B) its economic welfare must always fall.
C) its economic welfare will reduce if deadweight losses exceed gains by domestic producers. D) its economic welfare may increase if gains by domestic producers exceed deadweight losses.
20. Rent-seeking activities in the case of quotas are:
A) the government's efforts to receive higher returns for quota licenses.
B) bribery and lobbying
