Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506893
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter 16, Problem 6CQ
To determine
The beneficial group of the import restriction and the disadvantaged group.
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While import tariffs and import quotas can both be used to protect domestic producers, the import quota is the more effective policy when the policy goal is
a.
To protect domestic producers from declines in the world price
b.
To raise government revenue
c.
To protect producers from declines in domestic demand
d.
To minimize the inefficiency of the trade barrier
If the world price of textiles is lower than Vietnam’s domestic price of textiles without trade, then Vietnam
Group of answer choices
should refrain altogether from producing textiles.
has a comparative advantage in textiles.
should produce just enough textiles to meet its domestic demand.
should import textiles.
Suppose you are hired as a consultant by the government to determine the impact of trade policies. The government is suggesting a 10% nominal tariff on imported cars in order to limit competition against domestically assembled cars that incorporates only about 20 percent of domestic inputs in its total inputs. Discuss nominal tariffs and effective tariff rates. How much is the effective tariff rate? Why is the effective tariff rate different than the nominal tariff rate? Suppose the currency depreciation would lead to a higher price in the free market. However, the government wants to maintain the same amount of final price after tariffs. Determine the impact on the nominal tariff rate.
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Microeconomics: Private and Public Choice (MindTap Course List)
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