Chapter 9

raises the price of the good in H and lowers it in F.

If a good is imported into (large) country H from country F, then the imposition of a tariff in country H ______

lowers the price of the good in H and raises it in F.

If a good is imported into country H from country F, and if country F begins an export subsidy, it _____

the protection given by the tariff to domestic value added.

The effective rate of protection measures ______

increase decrease have no effect on decrease

A voluntary export restraint will ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

import taxes calculated as a fraction of the value of the imported goods.

Ad valorem tariffs are ____

a payment to a firm or individual that ships a good abroad.

An export subsidy is _____

increase decrease decrease decrease

An export subsidy will ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

tariff; does not generate revenue

An import quota is similar to a ________ in its effect on imports, EXCEPT that an import quota ________.

increase decrease have no effect on have an ambiguous effect on

An import quota will ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall domestic national welfare.

generate tax revenue for the government.

An important difference between tariffs and quotas is that tariffs ____

decrease consumer surplus and increase producer surplus.

In the country levying the tariff, the tariff will _____

hurt consumers and lower the overall economic welfare of the exporting country.

In the exporting country, an export subsidy will ____

import taxes calculated as a fixed charge for each unit of imported goods.

Specific tariffs are _____

domestic producers of the good produced.

The principle benefit of tariff protection goes to _____

improve

The terms of trade ___ for the country levying import tariff.

worsen

The terms of trade ___ for the country offering export subsidy.