What is the impact of a large country's imposition of a tariff on its volume of trade?

• A) It becomes unpredictable.
• B) It decreases.
• C) It remains constant.
• D) It increases.

Suppose the government of a small nation has imposed a specific tariff of $10 on each imported shirt, regardless of its price. If 100 shirts are imported, customs officials will collect the tariff revenue of:

• A) $1500
• B) $1000
• C) $500
• D) $100

Nations impose tariffs on imports of commodities to:

• A) Increase imports
• B) Protect domestic industries
• C) Promote free trade
• D) Increase consumer surplus

When a very small nation imposes a tariff, what happens to the price in the world market?

• A) It fluctuates.
• B) It remains unchanged.
• C) It decreases.
• D) It increases.

When a nation increases its tariff rate from an autarky position, what happens to its welfare?

• A) It reaches a maximum and then declines.
• B) It becomes unpredictable.
• C) It remains constant.
• D) It continuously increases.

The success of an international cartel depends on having:

• A) Only a few international suppliers of an essential commodity
• B) Close substitutes for the commodity
• C) Numerous international suppliers
• D) Free trade between nations

Which of the following is a drawback of import quotas compared to import tariffs?

• A) Import quotas involve the distribution of import licenses and can create a monopoly.
• B) Import quotas result in lower prices for consumers.
• C) Import quotas are more difficult to implement and enforce.
• D) Domestic producers do not prefer import quotas to import tariffs.

The government of a small tariff-imposing nation uses the tariff revenue to:

• A) Subsidize public consumption
• B) Provide income tax relief
• C) All of the given options
• D) Reduce the tariff rate

The height of the demand curve shows:

• A) All of the given options
• B) The maximum price that consumers would be willing to pay for each unit.
• C) The minimum price that consumers would be willing to pay for each unit.
• D) The price that consumers actually pay for each unit.

An import quota results in a higher domestic price and greater domestic production than an equivalent import tariff.

• A) True
• B) False
• C)
• D)

Persistent dumping involves selling a commodity at:

• A) Lower price abroad than domestically
• B) Higher price abroad than domestically
• C) Equal price abroad and domestically
• D) Above cost abroad and domestically

The purpose of voluntary export restraints (VERs) is to:

• A) Limit the quantity of imports from specific countries
• B) Promote free trade
• C) Promote fair trade practices between nations
• D) Decrease the protection of domestic industries

In Pakistan, the Ministry of Climate Change may impose quota allocations from time to time on imports of certain ozone-depleting substances.

• A) False
• B) True
• C)
• D)

Which of the following concepts explains the export of a commodity at a lower price abroad than domestically?

• A) Voluntary Export Restraints
• B) Export subsidy
• C) Dumping
• D) Import Quota

Export subsidies are payments to:

• A) Foreign buyers to decrease imports
• B) Domestic exporters to increase exports
• C) Foreign exporters to decrease exports
• D) Domestic consumers to increase consumption

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• A) Demand and supply curves of commodity X
• B) Supply and cost curves of commodity X
• C) Demand and price curves of commodity X
• D) Demand and cost curves of commodity X

The purpose of a customs union is to:

• A) Reduce the administrative and financial burden of barrier trading.
• B) All of the given options are correct.
• C) Make it easier for member countries to trade freely with each other.
• D) Foster economic cooperation among member nations.

Which of the following form of economic integration is the most advanced type of economic integration that harmonizes or unifies monetary and fiscal policies among member states?

• A) Common Market
• B) Free Trade Area
• C) Preferential trade agreement
• D) Economic Union

Which type of economic integration involves the free movement of labor and capital among member nations?

• A) Preferential trade agreement
• B) Free Trade Area
• C) Common Market
• D) All of the given options

Which forms of economic integration allow no tariffs or barriers on trade among members and also harmonize trade policies toward the rest of the world?

• A) Preferential trade agreement and free trade area
• B) Preferential trade agreement and customs union
• C) Free trade area and customs union
• D) Customs union and common market