Lesson M4.4.2
M4.4.2 Tariffs, quotas, trade creation and the WTO Quiz: OCR Economics, Unit 9
20 questions
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Lesson M4.4.2, Tariffs, quotas, trade creation and the WTO: 20 multiple choice questions for the OCR Economics (H460), Unit 9: The global context, written with Revision Ninja.
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The 20 questions
-
What type of trade protectionism is a tax placed specifically on imported goods?
- Quota
- Tariff
- Embargo
- Subsidy
-
What form of protectionism places a physical limit on the quantity of an imported good?
- Tariff
- Red tape
- Import quota
- Export subsidy
-
What term describes high-cost domestic production being replaced by lower-cost imports within a trading bloc?
- Trade embargo
- Trade deficit
- Trade creation
- Trade diversion
-
What occurs when trade shifts from a low-cost producer outside a trading bloc to a higher-cost member?
- Trade creation
- Trade liberalisation
- Trade diversion
- Trade surplus
-
What is the primary role of the World Trade Organization in international trade?
- Promoting free trade
- Controlling inflation
- Fixing exchange rates
- Managing national debt
-
Which WTO principle requires equal trade terms to be offered to all member nations?
- Preferential tariff
- Special protectionism
- Most-Favoured-Nation
- National treatment
-
What happens to domestic consumer surplus when a tariff is imposed on imported goods?
- It decreases
- It increases
- It stays constant
- It doubles
-
What represents the net loss of economic welfare caused by the imposition of a tariff?
- Producer surplus
- Import quota
- Tariff revenue
- Deadweight loss
-
How does a tariff on imported cars affect domestic car manufacturers' producer surplus?
- Decreases
- Unchanged
- Increases
- Eliminates
-
What is government tax revenue from a £5 tariff applied to 1,000 imported units?
- £500
- £5,000
- £50,000
- £200
-
Who receives the extra revenue created by higher domestic prices under an import quota?
- The IMF
- Domestic consumers
- Foreign taxpayers
- Quota licence holders
-
Unlike tariffs, an unauctioned import quota directly generates no revenue for which group?
- Retailers
- The government
- Importers
- Domestic firms
-
In the short run, how does a tariff affect employment in the protected domestic industry?
- Increases employment
- Decreases employment
- Has zero effect
- Causes redundancies
-
What overall effect does trade creation have on net economic welfare for member countries?
- Zero impact
- Decreases welfare
- Indefinite loss
- Increases welfare
-
How does the WTO handle trade conflicts between member nations?
- World Bank court
- Bilateral tariffs
- Dispute Settlement Body
- Unilateral sanctions
-
What type of tariff is levied as a fixed percentage of the imported good's price?
- Specific tariff
- Compound tariff
- Export duty
- Ad valorem tariff
-
What type of tariff is charged as a fixed monetary amount per unit of imported good?
- Preferential tariff
- Ad valorem tariff
- Revenue tariff
- Specific tariff
-
Why can trade diversion reduce overall global economic efficiency?
- Import taxes increase
- Domestic prices fall
- Production shifts uncompetitively
- Exports become illegal
-
If world price is £100 and a 15% ad valorem tariff is added, what is domestic price?
- £115
- £150
- £110
- £105
-
Excessive administrative paperwork required for imports is an example of what trade barrier?
- Export subsidy
- Preferential tariff
- Non-tariff barrier
- Ad valorem tariff
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