Lesson M4.4.2

M4.4.2 Tariffs, quotas, trade creation and the WTO Quiz: OCR Economics, Unit 9

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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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

  1. What type of trade protectionism is a tax placed specifically on imported goods?

    • Quota
    • Tariff
    • Embargo
    • Subsidy

  2. What form of protectionism places a physical limit on the quantity of an imported good?

    • Tariff
    • Red tape
    • Import quota
    • Export subsidy

  3. 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

  4. 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

  5. What is the primary role of the World Trade Organization in international trade?

    • Promoting free trade
    • Controlling inflation
    • Fixing exchange rates
    • Managing national debt

  6. Which WTO principle requires equal trade terms to be offered to all member nations?

    • Preferential tariff
    • Special protectionism
    • Most-Favoured-Nation
    • National treatment

  7. What happens to domestic consumer surplus when a tariff is imposed on imported goods?

    • It decreases
    • It increases
    • It stays constant
    • It doubles

  8. What represents the net loss of economic welfare caused by the imposition of a tariff?

    • Producer surplus
    • Import quota
    • Tariff revenue
    • Deadweight loss

  9. How does a tariff on imported cars affect domestic car manufacturers' producer surplus?

    • Decreases
    • Unchanged
    • Increases
    • Eliminates

  10. What is government tax revenue from a £5 tariff applied to 1,000 imported units?

    • £500
    • £5,000
    • £50,000
    • £200

  11. Who receives the extra revenue created by higher domestic prices under an import quota?

    • The IMF
    • Domestic consumers
    • Foreign taxpayers
    • Quota licence holders

  12. Unlike tariffs, an unauctioned import quota directly generates no revenue for which group?

    • Retailers
    • The government
    • Importers
    • Domestic firms

  13. In the short run, how does a tariff affect employment in the protected domestic industry?

    • Increases employment
    • Decreases employment
    • Has zero effect
    • Causes redundancies

  14. What overall effect does trade creation have on net economic welfare for member countries?

    • Zero impact
    • Decreases welfare
    • Indefinite loss
    • Increases welfare

  15. How does the WTO handle trade conflicts between member nations?

    • World Bank court
    • Bilateral tariffs
    • Dispute Settlement Body
    • Unilateral sanctions

  16. 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

  17. 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

  18. Why can trade diversion reduce overall global economic efficiency?

    • Import taxes increase
    • Domestic prices fall
    • Production shifts uncompetitively
    • Exports become illegal

  19. If world price is £100 and a 15% ad valorem tariff is added, what is domestic price?

    • £115
    • £150
    • £110
    • £105

  20. 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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