Answer: C
58.
The optimum tariff is most likely to apply to

• a small tariff imposed by a small country.
• a small tariff imposed by a large country.
  
• a large tariff imposed by a small country.
• a large tariff imposed by a large country.
• None of the above.

Answer: B59.
The existence of marginal social benefits which are not marginal benefits for the industry producing the import substitutes

• is an argument supporting free trade and non-governmental involvement.
• is an argument supporting the use of an optimum tariff.
• is an argument supporting the use of market failures as a trade-policy strategy.
• is an argument rejecting free trade and supporting governmental involvement.
• None of the above.

Answer: D60.
The domestic market failure argument is a particular case of the theory of

• the optimum, or first-best.
• the second best.
  
• the third best.
• the sufficing principle.
• None of the above.

Answer: B
61.
The median voter model

• works well in the area of trade policy.
• is not intuitively reasonable.
• tends to result in biased tariff rates.
• does not work well in the area of trade policy.
• None of the above.

Answer: D
62.
The fact that trade policy often imposes harm on large numbers of people, and benefits only a few may be explained by

• the lack of political involvement of the public.
• the power of advertisement.
• the problem of collective action.
• the basic impossibility of the democratic system to reach a fair solution.
• None of the above.

Answer: C
63.
A trade policy designed to alleviate some domestic economic problem by exporting it to foreign countries is know as a(n)

• international dumping policy.
• countervailing tariff policy.
• beggar thy neighbor policy.
• trade adjustment assistance policy.
• None of the above.

Answer: C
64.
Countervailing duties are intended to neutralize any unfair advantage that foreign exporters might gain because of foreign

• tariffs.

B. subsidies.

• quotas.
• Local-Content legislation
• None of the above.

Answer: B
65.
Export embargoes cause greater losses to consumer surplus in the target country

• the lesser its initial dependence on foreign produced goods.
• the more elastic is the target country's demand schedule.
• the more elastic is the target country's domestic supply.
• the more inelastic the target country's supply.
• None of the above.

Answer: D
66.
The World Trade Organization provides for all of the following except

• the usage of the most favored nation clause.
• assistance in the settlement of trade disagreements.
• bilateral tariff reductions.
  
• multilateral tariff reductions.
• None of the above.

Answer: C
68. Under U.S. commercial policy, the escape clause results in

• temporary quotas granted to firms injured by import competition.
  
• tariffs that offset export subsidies granted to foreign producers.
• a refusal of the U.S. to extradite anyone who escaped political oppression.
• tax advantages extended to minority-owned exporting firms.
• tariff advantages extended to certain Caribbean countries in the U.S. market.

Answer: A

PartⅣ. Each term in the left column is related to a particular content in the right column, please match each pair with a line.
1.

Nontraded goods	Price effect of tariff or export subsidy
Specific factor	Biased growth
Optimum tariff	Nontariff barrier
Collective action	Real exchange rate
Metzler paradox	Income distribution
Rybczynski effect	The terms of trade argument for a tariff
Local content requirement	Trade politics
Intertemporal trade	The instruments of trade policy
Harris-Todaro problem	Wage differentials argument
Efficiency loss	International borrowing and lending

2.

Leontief paradox	Economies of scale
Terms of trade	Voluntary export restraint
Specific rule	Custom union
Learning curve	Factor-proportions theory
Intraindustry trade	Standard trade model
Quota rents	Domestic market faiture
Trade diversion	Dynamic economics of scale
Import-substituting industrialization	Tariff
First movement advantage	Strategic trade policy
Terms of trade gain	Infant industry argument

PartⅤ.
Explain the following terms(Put the answers onto the blank exam paper) .
pauper labor argument
Stolper-Samuelson effect
Rybczynski effect
Metzler paradox
dynamic increasing returns
intertemporal trade
intertemporal comparative advantage
terms of trade gain
trade diversion
collective action

PartⅥ.