OS Worksheet International Trade (Micro)

A new U.S. import quota on imported steel would be likely to

**decrease U.S. production of steel.

The membership of the WTO includes about____nations.

180

The acronym GATT stands for:

General Agreement on Tariffs and Trade.

______are numerical limitations on the quantity of products that can be imported.

Import quotas

It is sometimes argued that nation should not depend too heavily on other countries for supplies of certain key products. This argument is commonly known as the_____ .

National Interest Argument

______ are ways that a nation can draw up regulations, inspections, and paperwork to make it more costly or difficult to import products.

Nontariff barriers

_____ is theoretically possible, even sensible: give an industry a short-term indirect subsidy through protection, and then reap the long-term economic benefits of having a vibrant healthy industry.

The infant industry argument

Protectionist legislation is often passed because

both employers and workers in the affected industry lobby for protectionist policies.

Introducing a tariff on vitamin E would

d. do all of the above. a. reduce imports of vitamin E. b. increase U.S. consumption of domestically produced vitamin E. c. decrease total U.S. consumption of vitamin E.

The infant-industry argument for protectionism claims that an industry must be protected in the early stages of its development so that

domestic producers can attain the economies of scale to allow them to compete in world markets.

An import quota or tariff on French wine that raises the prices for wine will probably:

hurt domestic wine drinkers but help domestic wineries, which will gain from the higher prices.

A crucial difference between the impacts of import quotas and of tariffs is that

import quotas generate no revenue to the domestic government, but tariffs do.

Tariffs are taxes imposed on _________________.

imported products

After the USA introduces a tariff in the market for gigastraps, the price of gigastraps in the USA will:

increase

A new American import quota on imported steel would be likely to:

increase American production of steel.

Import tariffs generally_____ the output of domestic producers of the affected products and also _____the output of domestic exporters.

increase; decrease

An import quota does which of the following?

increases the price of the domestic goods to consumers

"Tariffs and other trade restrictions increase the domestic scarcity of products from abroad. Such policies benefit domestic producers of the restricted products at the expense of domestic consumers." This statement:

is essentially correct.