ch 7 intb 265 quiz

Myra is a firm producing premium handbags for women. These bags are manufactured and patented in the country of Ceria. Manufacturers in the country of Argonia create counterfeit Myra bags and sell them in the local markets of Argonia. These bags are sold at almost similar prices to the original in other countries. Which of the following is likely to happen?

reduction in the export opportunities for Myra's handbags in Argonia

The country of Cadmia, which is a leading producer of bauxite, had to impose trade sanctions on Cerian soda cans in order to get the government of Ceria to enforce export restraints. This imposition by the Cadmian government was undertaken to protect domestic producers of soda cans. Which of the following government intervention is being used by Cadmia?

retaliation

Which of the following is a trade policy instrument that the GATT and WTO have been most successful in limiting?

tariffs

Which of the following is a major reason why many economists remain critical of the infant industry argument?

It makes the domestic industry inefficient.

Why did telecommunications companies welcome the telecommunication deal brokered by WTO in 1997?

It offered a greater ability for companies to offer a global, seamless service for all their corporate needs

The Bureau of Natural Resources, a U.S. government agency, put out a contract for 45,000 document copiers. It stipulated in the contract letter that preference would be given to a bidder for whom at least 51 percent of the materials by value in the copier were produced in the U.S. This contract provision is covered by the

Buy America Act.

By lowering production costs, subsidies help foreign competitors gain export markets

False

In recent decades, a fall in subsidies, quotas, and voluntary export restraints has been accompanied by a rise in tariff barriers

False

Which of the following statements is true about import quotas?

Import quotas benefit domestic producers by limiting import competition.

Which of the following is true regarding the difference between GATT and WTO?

The WTO was encouraged to extend its reach to encompass regulations governing foreign direct investment unlike GATT.

A firm may set up production activities in a foreign country, where trade barriers do not currently exist, to reduce the threat of trade barriers being imposed later.

True

Antidumping actions seem to be concentrated in certain sectors of the economy such as basic metal industries (e.g., aluminum and steel), chemicals, plastics, and machinery and electrical equipment.

True

Both import quotas and voluntary export restraints (VERs) benefit domestic producers by limiting import competition

True

One of the reasons for the trend toward greater protectionism during the 1980s and 1990s was that many countries found ways to get around GATT regulations.

True

Which of the following are bureaucratic rules designed to make it difficult for imports to enter a country

administrative trade policies

Which of the following are bureaucratic rules designed to make it difficult for imports to enter a country?

administrative trade policies

According to Krugman, the ideal way for a country to respond, when the foreign competitors of its companies are already being supported by government subsidies, is probably not to engage in retaliatory action, but to

help establish rules that minimize the use of trade-distorting subsidies.

The principal function of the trade sanctions the U.S. has in place against Cuba is to

impoverish Cuba to lead to the downfall of the communist government

Which of the following has been excluded from the agenda for the Doha Round of WTO talks that began in 2001?

attempts to tie trade to labor standards in a country

If Argonia exports vast quantities of cheap toys to Cadmia, selling them at below their costs of production, it would constitute

dumping.

Dumping takes place when foreign producers

eliminate competition by subsidizing prices in a foreign market with home market profits and eventually raising prices to earn substantial profits

The United States accused Libya and Iran of supporting terrorist action and building weapons of mass destruction. The U.S. government, therefore, imposed trade sanctions against the two countries. Which of the following political arguments does this exemplify?

furthering foreign policy objectives

By lowering production costs, subsidies help domestic producers to

gain export markets.

Which of the following is NOT a constraint on a firm's ability to disperse its productive activities to foreign countries?

increasing integration of the world economy

Which of the following is the most common political argument for government intervention in international trade?

protecting jobs and industries from unfair foreign competition

According to Paul Krugman, a country that attempts to use strategic trade policy to establish a domestic firm in a dominant position in a global industry, is most likely to

provoke retaliation.

Because Maroji limits the annual export of dairy products to Mipon, Mipon's dairy producers reap extra annual profits of $500 million. The extra profit is referred to as

quota rent.

Which of the following is a loophole in antidumping laws that is being exploited by many countries to pursue protectionism?

vague definition of what constitutes "dumping"