4. International Economics

Trade Policy — Quiz

Test your understanding of trade policy with 5 practice questions.

Practice Questions

Question 1

In the standard welfare analysis of a specific import tariff in a small open economy, the consumption distortion loss arises from:

Question 2

Given demand $Q_D = 100 - P$ and supply $Q_S = P - 20$, with world price $P_w = 30$ and a specific tariff $t = 10$, what is the government revenue from the tariff?

Question 3

Which of the following describes an advantage of ad valorem tariffs compared to specific tariffs?

Question 4

Under an ad valorem tariff at rate $\tau$, how is the domestic import supply curve shifted in terms of world price $P_w$?

Question 5

In a small open economy, a specific per-unit export subsidy of amount $s$ to domestic producers causes which shift in the domestic supply curve?