Homework 5. INTL Trade

What is the key tradeoff of intellectual property protection? A) Welfare gain from more innovations v.s. welfare loss from higher prices of innovations B) Welfare gain from more innovations v.s. fall in cross-border trade flows C) Welfare gain for certain lobbying groups v.s. loss in consumer welfare D) Welfare gain for domestic innovators v.s. welfare loss for foreign innovators

A) Welfare gain from more innovations v.s. welfare loss from higher prices of innovations

The political economy of tariffs indicates that as the government cares more about its firms' profits relative to consumer welfare, import tariffs would tend to: A) rise. B) fall. C) remain unchanged. D) the change is indeterminate.

A) rise.

Which of the following industries is most often protected by high import tariffs? A) Manufacturing. B) Agriculture. C) Service. D) E-commerce.

B) Agriculture.

To be qualified for patent protection the invention has to meet the following criteria except A) Non-obviousness. B) Creativity. C) Novelty. D) Industrial applicability.

B) Creativity.

Which of the followings is NOT a fact about tariffs: A) World average tariffs have been reducing stably since WWII. B) Developed countries tend to impose higher tariffs than developing countries. C) Tariffs can vary across industries within a country. D) The gap in tariffs in developed and developing countries is falling.

B) Developed countries tend to impose higher tariffs than developing countries.

From the world's point of view, an import tariff is expected to A) improve world welfare B) lower world welfare C) not affect world welfare D) more information is needed

B) lower world welfare

An import quota is different from a voluntary export restraint because: A) the former is imposed by the exporting country and the latter by the importing country. B) the former is imposed by the importing country and the latter by the exporting country. C) the latter is specified by domestic importers D) the former results in less gain for the country.

B) the former is imposed by the importing country and the latter by the exporting country.

Which of the followings is a specific tariff? A) 30% of the import price B) $0.5 per $1 worth of the car C) $5 per kilogram of rice D) $100 per $1000 worth of the good

C) $5 per kilogram of rice

Which of the following is NOT a flexibility the GATT/WTO gives to its member countries? A) A country can impose punitively high tariffs on foreign firms dumping in its market. B) A country can implement temporary import quotas if growing imports of particular products cause serious injury to its domestic industries. C) A country can subsidize its exports if its firms are not competitive on the global market. D) A country can impose countervailing duties on the imports that are subsidized by foreign governments.

C) A country can subsidize its exports if its firms are not competitive on the global market.

Which of the following is a reason for a country to impose an import tariff? A) An import tariff discourages domestic production. B) An import tariff reduces the benefits for domestic producers. C) An import tariff is a source of revenue for the government. D) An import tariff encourages domestic consumers to buy foreign goods.

C) An import tariff is a source of revenue for the government.

What is the most fundamental difference between intellectual and physical property? A) Intellectual property is more pricy. B) Intellectual property is more important to economic stability. C) Intellectual property is non-rival. D) It takes more time to produce intellectual property

C) Intellectual property is non-rival.

Which of the following is unlikely to be an effect of unilateral reduction of import tariffs? A) It could hurt the country that reduces the tariffs. B) It benefits the trading partners of the country that reduces the tariffs. C) It hurts the world as a whole. D) It benefits the world as a whole.

C) It hurts the world as a whole.

Import tariffs are ___________ on imports, and import quotas are ____________ on imports. A) subsidies; taxes B) limits; subsidies C) taxes; limits D) limits; taxes

C) taxes; limits

Which of the following is NOT an example of intellectual property? A) The character of Mickey Mouse. B) Microsoft Office. C) An academic paper about economics. D) An MP3 player.

D) An MP3 player.

Suppose you come up with an attractive appearance of the cellphone produced by your company. Which of the following intellectual property rights is most suitable for this invention: A) Patent. B) Utility model. C) Trademark. D) Industrial design.

D) Industrial design.

Which of the following is NOT an effect of an import tariff? A) It increases producer surplus by reducing foreign competition. B) It raises government revenue. C) It reduces consumer surplus by raising the market price. D) It makes foreign exporters more competitive.

D) It makes foreign exporters more competitive.

The Smoot-Hawley Tariff Act A) Created NAFTA. B) Changed US tariffs to be in compliance with the GATT. C) Restricted US imports of motorcycles in the 1970s. D) Raised US tariffs on thousands of products at the start of the 1930s.

D) Raised US tariffs on thousands of products at the start of the 1930s.

One feature of the GATT and now the WTO is that any member nation should treat its trading partners the same in terms of trade rules and restrictions. This provision is called: A) national treatment. B) the good neighbor policy. C) rotating obligations. D) most favored nation.

D) most favored nation.