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Non-Tariff Trade Barriers – MCQs
46 questions. Click to practice.
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Correct options are highlighted when revealed.
1.
If a country permits only a fixed quantity of a product to be imported annually without restricting the source country or the importer, what type of trade restriction is this called?
an import duty
a tariff rate quota
a specific quota
a global quota
a voluntary export restraint
2.
In a tariff-rate quota system, how do the tariff rates inside and outside the quota compare?
The tariff applied within the quota is higher than the tariff applied beyond the quota
The tariff imposed outside the quota is higher than the tariff applied within the quota
The tariff rates inside and outside the quota are the same
The sum of the tariffs inside and outside the quota equals 100 percent
The tariff outside the quota is lower than the tariff within the quota
3.
To achieve maximum profit, at what price should the company sell computers in the United States and how many units should it sell in Japan at what price?
200 units at $2,000 in the U.S. and 100 units at $1,000 in Japan
300 units at $1,800 in the U.S. and 800 units at $800 in Japan
300 units at $1,800 in the U.S. and 400 units at $800 in Japan
500 units at $1,400 in the U.S. and 400 units at $800 in Japan
4.
What do buy national policies typically lead to?
Government procurement strategies that prioritize domestic suppliers over international ones
Government procurement strategies that prioritize international suppliers over domestic ones
Measures designed to limit the number of citizens traveling abroad
Efforts aimed at promoting the strengths of the most competitive local companies
5.
Which trade restriction was implemented to shield U.S. automobile manufacturers from foreign competitors between 1981 and 1984?
Export quotas enforced by the Japanese government
Export duties levied by Japan's government
Import limits set by the United States government
Domestic financial aid provided by the U.S. government
6.
What term describes a company selling excess inventory in international markets due to unexpected fluctuations in supply and demand within its domestic economy?
sporadic dumping
predatory dumping
persistent dumping
foreign dumping
7.
Which type of international price discrimination, often linked to economic downturns or surplus stock in the exporting country, is referred to as?
Predatory dumping
Sporadic dumping
Continuous dumping
End-of-year dumping
Seasonal dumping
8.
What best describes a tariff-rate quota?
A two-level tariff imposed on a nation's imports
A three-level tariff imposed on a imports of a country
A two-level quota applied to a country's exports
A three-level quota applied to a nation's exports
9.
Which of the following is NOT considered a nontariff barrier to trade?
Laws requiring a certain percentage of local materials
Policies governing government purchasing decisions
Regulations related to health, safety, and environmental protection
Import duties imposed to counteract dumping or subsidized goods
Quotas limiting the quantity of imported goods
10.
Which type of quota involves foreign entities possessing quota licenses?
export quota
trade embargo
quota auction
tariff-rate quota
import quota
11.
Under what condition can the government of the importing country capture the revenue generated by an import quota?
If quota permits are allocated to foreign exporters
If quota permits are sold through an auction to the importing firms willing to pay the most
If quota permits are distributed to local consumers of the product
If quota permits are assigned both to foreign exporters and local consumers
If quota permits are given freely to all importers
12.
Which factor greatly influences the welfare impact of a quota?
The identity of the quota license holder
The magnitude of the quota imposed
The responsiveness of domestic demand and supply
All the factors mentioned above
13.
Which type of quota results in a total prohibition of trade?
Embargoes
Voluntary export limits
Non-tariff restrictions
Organized marketing accords
None of the above
14.
In some sectors, Japanese companies avoid dismissing employees, resulting in surplus products that cannot be sold domestically without reducing prices. To minimize losses, these products are sold abroad at prices significantly lower than those in Japan. What is this practice called?
Regulated marketing
Predatory pricing
Local content pricing
Dumping
Price skimming
15.
Do governments worldwide frequently sell quota licenses to the highest bidder through auctions?
At all times
Regularly
Rarely
Not at all
Sometimes
16.
What does it imply to claim that South Koreans are dumping their DVDs in the United States?
South Koreans are offering DVDs in the U.S. at prices below their manufacturing cost
South Koreans are selling DVDs in the U.S. at prices exceeding their production expenses
The expense of producing DVDs in Korea is cheaper than in the U.S. due to lower wages in Korea
The cost to produce DVDs in Korea is higher than in the U.S. because wages are greater in Korea
17.
Which of the following is NOT a typical consequence of import quotas?
Local manufacturers of the imported product experiencing negative effects
Consumers in the importing country facing disadvantages
An increase in prices within the country imposing the quota
A reduction in prices in the country exporting the product
18.
When import licenses are sold through an auction to local importers in a competitive market, who receives the revenue generated from their scarcity value?
International companies
Overseas employees
Local businesses
The national government
None of the above
19.
If the government grants a $10 subsidy for every calculator produced to support local manufacturers, what will be the new quantity of imports and the resulting deadweight loss to the Canadian economy?
20 calculators imported, $50 deadweight loss
20 calculators imported, $100 deadweight loss
25 calculators imported, $50 deadweight loss
25 calculators imported, $100 deadweight loss
20.
What are the equilibrium price and quantity for calculators in Canada when there is no international trade?
$65 per calculator and 40 units sold
$55 per calculator with 20 units sold
$45 per calculator and 25 units sold
$30 per calculator and 40 units sold
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