SOLVED

21) An agreement negotiated by two countries that places a numerical limit on the quantity of a good that can be imported by one country from another country is called A) a non-tariff trade barrier. B) an export quota. C) an import quota. D) a voluntary export restraint. 22) The main purpose of most tariffs and quotas is to A) raise revenue for the government. B) reduce the prices consumers pay for goods and services. C) reduce the foreign competition that domestic firms face. D) improve the quality of goods and services imported into the country. 23) Which of the following is the best example of a quota? A) a limit imposed on the number of sport utility vehicles that the United States can import from Japan B) a subsidy granted by the U.S. government to domestic garment manufacturers so they can compete more effectively with foreign garment manufacturers C) a tax placed on all sport utility vehicles sold in the domestic market D) a $5,000 per-car fee imposed on all sport utility vehicles imported into the United States 24) In order to avoid the imposition of other types of trade barriers, foreign producers will sometimes agree to voluntary export restraints. With voluntary export restraints, foreign producers A) agree to meet specific quality standards required by the importing country. B) limit their exports to a country. C) pay a tax on all products they export. D) must agree to import an equal quantity of products that they export. 25) Refer to Figure 19-3. Without the quota, the domestic price of peanuts equals the world price which is $2.00 per pound. What is the quantity of peanuts supplied by domestic producers in the absence of a quota? A) 10 million pounds B) 28 million pounds C) 30 million pounds D) 40 million pounds 26) Refer to Figure 19-3. If there was no quota, how many pounds of peanuts would domestic consumers purchase and what quantity would be imported? A) 28 million pounds of which 18 million pounds would be imported B) 40 million pounds of which 12 million pounds would be imported C) 40 million pounds of which 30 million pounds would be imported D) 40 million pounds all of which would be imported 27) Refer to Figure 19-3. What is the area of domestic producer surplus without a quota? A) C B) C + B C) A + B + C D) A + B + C + D 28) Refer to Figure 19-3. With a quota in place, what is the quantity consumed in the domestic market and what portion of this is supplied by domestic producers? A) Domestic consumption equals 28 million pounds of which 18 million pounds are produced by domestic producers. B) Domestic consumption equals 40 million pounds of which 22 million pounds are produced by domestic producers. C) Domestic consumption equals 34 million pounds of which 16 million pounds are produced by domestic producers. D) Domestic consumption equals 34 million pounds of which 18 million pounds are produced by domestic producers. 29) Refer to Figure 19-3. What is the area of consumer surplus after the imposition of the quota? A) A + G + H B) G + H + E + I+ J + M C) G + H D) A 30) Refer to Figure 19-3. What is the area of domestic producer surplus after the imposition of a quota? A) B B) B + C C) B + E + I + J + M D) E + I + J + M