国际经济学第9章(Helen)

第9章贸易政策中的政治经济学一、概念题1．约束（binding）答：在国际贸易中，约束一般是指税率的约束，即“约束”关税的税率。

约束税率是指经过谈判达成协议而固定下来的关税税率。

按关贸总协定规定，缔约各国应该在互惠互利的基础上通过有选择的产品对产品的方式，或者为有关缔约国所接受的多边的程序进行谈判，谈判结果固定下来的各国税则商品的税率为约束税率，汇总起来形成减让表，作为总协定的一个附属部分付诸实施。

按关贸总协定规定，关税减让谈判有四种减让形式来约束关税的税率：①降低关税并约束在降低了的关税水平；②约束现行关税税率；③约束在现行关税水平以上的某个关税水平；④约束免税待遇。

2．支持自由贸易的政治依据（political argument for free trade）答：支持自由贸易的政治依据是指，尽管理论上可能还有比自由贸易更好的政策，但从政治上认可和支持自由贸易的原则更重要。

现实中的贸易政策经常会由具有特殊利益关系的集团所左右，而不考虑国家的成本与收益。

虽然从理论上可以证明某些选择性的关税和出口补贴政策能够增进整体社会福利，但现实中，任何一个政府机构在制定一套干预贸易的详细计划时都有可能被利益集团所控制，从而成为在有政治影响的部门中进行收入再分配的工具。

如果上述观点正确的话，那么倡导自由贸易无疑是最好的选择。

3．集体行动（collective action）答：集体行动是指关于经济活动中个人理性并不必然导致集体理性。

如果某项活动或者福利的获得需要两个或者两个以上的人的共同努力才能完成，集体行动问题就出现了，即决策集体的每个成员必须单方面决定是否参与提供某种集体产品。

因为集体产品具有非排他性和非竞争性的特征，所以使得不为集体产品的提供付出成本的集团成员也可以获得集体产品。

集团越大，分享收益的人越多，个人的行动对集团利益的影响越小，集团内的成员“搭便车”的动机就越强烈。

这就意味着仅仅依靠个人的自愿，集体产品的供给将是不足的，集体产品不可能依靠个人的自愿提供来解决。

第九章国际贸易壁垒与出口促进一、关键词1. 小国。

又称贸易小国，指对某种产品进口或出口数量的增加或减少对该产品的国际市场价格不造成影响的国家。

2. 大国。

又称贸易大国，指对某种产品进口或出口数量的增加或减少对该产品的国际市场价格会造成显著影响的国家。

3. 局部均衡。

只讨论单一产品市场供求均衡的分析方法。

4. 一般均衡。

将所有产品的供求均均衡纳入同一框架或模型的分析方法。

5. 有效保护率。

衡量设置进口贸易壁垒（如进口关税、进口配额等）所引起的国内制造过程的市场价值补偿额（或称增加值额）的变化率。

6. 关税结构。

关税结构亦称关税税率结构，是指一国关税税则中各类商品关税税率高低的相互关系。

7. 寻租。

指在没有从事生产活动的情况下，为垄断社会资源或维持垄断地位从而获取垄断利润（亦即经济租金），所从事的一种非生产性寻利活动。

例如，当政府按照资源使用申请程序分配进口配额时，由于政府垄断了进口许可证的发放，就可能产生寻租行为。

8. 商品倾销。

指在不同国家市场间进行的一种价格歧视行为，即出口商以低于本国国内价格或成本向国外销售商品的行为。

9. 反倾销。

指政府对外国企业在本国市场上的倾销行为所采取的应对措施，通常的反倾销措施包括对实施倾销的进口产品征收反倾销税或者反补贴税。

二、复习与思考1. 对于进口配额与等额关税，如果让国内生产者来选择，它们会选择哪种措施？答：进口配额更能达到限制进口的目的，并有寻租的可能。

国内生产者愿意选择配额。

2. 你被要求对A国的食糖进口关税对于社会福利的影响进行量化分析。

此工作最为繁重的一部分已经完成：有人已经估算了没有食糖关税情况下的食糖生产量、消费量和进口量，你得到如下信息。

A国食糖的生产与贸易信息试估算：（1）A国消费者从取消关税中得到的收益。

（2）A国生产者从取消关税中遭受的损失。

（3）取消关税导致的A国政府的关税损失。

（4）取消关税对A国社会福利的影响。

答：（1）为了帮助分析，现画出局部均衡图形。

*CHAPTER 9(Core Chapter)NONTARIFF TRADE BARRIERS AND THE NEW PROTECTIONISM OUTLINE9.1 Introduction9.2 Import Quotas9.2a Effects of an Import QuotaCase Study 9-1: The Economic Effects of the U.S. Quota on Sugar Imports9.2b Comparison of an Import Quota to an Import Tariff9.3 Other Nontariff Barriers and the New Protectionism9.3a Voluntary Export RestraintsCase Study 9-2: Voluntary Export Restraints on Japanese Autos to the United States9.3b Technical, Administrative, and Other Regulations9.3c International Cartels9.3d DumpingCase Study 9-3: Antidumping Measures in Force in 20049.3e Export SubsidiesCase Study 9-4: Agricultural Subsidies in Developed NationsCase Study 9-5: Countervailing Measures in Force in 2004Case Study 9-6: The Pervasiveness of Nontariff Barriers9.4 The Political Economy of Protectionism9.4a Fallacious and Questionable Arguments for Protection9.4b Infant-Industry and Other Qualified Arguments for Protection9.4c Who Gets Protected?Case Study 9-7: Welfare Effects on the U.S. Economy of Removing All ImportRestraintsCase Study 9-8: Effects on the World Economy of Removing All ImportRestraints9.5 Strategic Trade and Industrial Policies9.5a Strategic Trade Policy9.5b Strategic Trade and Industrial Policies with Game Theory9.5c The U.S. Response to Foreign Industrial Targeting and Strategic TradePolicy9.6 History of U.S. Commercial Policy9.6a The Trade Agreements Act of 19349.6b The General Agreements on Tariffs and Trade (GATT)9.6c The 1962 Trade Agreements Act and the Kennedy Round9.6d The Trade Reform Act of 1974 and the Tokyo Round9.6e The 1984 and 1988 Trade Acts9.7 The Uruguay Round and Outstanding Trade Problems9.7a The Uruguay RoundCase Study 9-9: Gains from the Uruguay RoundCase Study 9-10: The Multilateral Rounds of Trade Negotiations9.7b Outstanding Trade ProblemsCase Study 9-11: Benefits from a “Likely” Doha ScenarioAppendix: A9.1 Centralized CartelsA9.2 International Price DiscriminationA9.3 Tariffs, Subsidies and Domestic GoalsKey TermsQuota Smoot-Hawley Tariff Act of 1930 Nontariff trade barrier (NTBs) Trade Agreements Act of 1934New protectionism Most-favored-nation principleVoluntary export restraints (VERs) Bilateral TradeTechnical, administrative, and General Agreement on Tariff andother regulations Trade (GATT)International cartel Multilateral Trade NegotiationsDumping International Trade Organization (ITO) Persistent dumping Peril-point provisionsPredatory dumping Escape clauseSporadic dumping National security clauseTrigger-price mechanism Trade Expansion Act of 1962Export subsidies Trade Adjustment Assistance (TAA) Export-Import bank Kennedy RoundForeign Sales Corporations Trade Reform Act of 1974 Countervailing duties (CVDs) Tokyo RoundScientific tariff Trade and Tariff Act of 1984Infant-industry argument Omnibus Trade and Competitiveness Act of 1988Strategic trade policy Uruguay RoundIndustrial Policy World Trade Organization (WTO)Game theory GlobalizationAnti-Globalization MovementLecture Guide:1.This is an important core chapter examining some of the most recentdevelopments in international trade policy.2.I would cover sections 1 and 2 in lecture 1. I would pay particular attention toFigure 9-1, which examines the partial equilibrium effects of an import quota. 3.I would cover section 3 in lecture 2. Here I would clearly explain the differencebetween a regular import quota and a voluntary export restraint. I would alsoclearly explain dumping and Figure 9-2 (which deals with export subsidies). The five case studies serve to highlight the theory and show the relevance of thetheory in today's world.4.I would cover section 4 in lecture 3. Here I would give special attention to thefallacious arguments for protection since they are often heard in commondiscussions of trade matters. I would also clearly explain the importance ofstrategic trade and industrial policy and the political economy of who getsprotected.5.I would cover section 5 in lecture 4, which examines strategic trade andindustrial policies policies with game theory. This is not difficult and thestudents will find it very interesting.6.Sections 6 and 7 can be covered in lecture 5. Here I would stress the UruguayRound and the outstanding international trade problems.Answer to Problems:1. Nations restrict trade either in response to lobbying by the producers of acommodity in which the nation has a comparative disadvantage or to gain astrategic advantage in relation to other nations. The first leads to a welfare loss for he nation as a whole. The second is very difficult to achieve.2. The partial equilibrium effects of the import quota are:P x=$1.50; consumption is 45X, of which 15X are produced domestically;by auctioning off import licenses, the revenue effect would be $15.3. The partial equilibrium effects of the import quota are:P x=$2.50; consumption is 40X, of which 10X are produced domestically;the revenue effect is $45.4. The partial equilibrium effects of the quota are:P x=$2; domestic production and consumption are 50X; The revenue is zero.5. The partial equilibrium effects of the quota are:P x=$1; consumption is 70X, production is 30X, and revenue is zero.6. The partial equilibrium effects of a negotiated export quota of 30X are:P x=$4; domestic production is 40X, of which 10X are consumed at home.7.An export tariff or quota, as an import tariff or quota, affects the price of thecommodity and domestic consumption and production. But the effects are theopposite.8. See Figure 1.The equilibrium price of the commodity is P x=OC and the equilibrium quantity is Q x=OB in Figure 1.9.If the supply curve of the commodity in Figure 1 referred to a cartel ofexporters acting as a monopolist, P x=OF and Q x=OA (see Figure 1).10. P x is higher and Q x smaller when exporters behave as a monopolist.11. a) The monopolist should charge P1=$4 in the domestic market and P2=$3 inFigure 9-5 in Appendix A9.2.b) This represents the best, or optimal distribution of sales between the twomarkets because any other distribution of sales in the two markets gives lessrevenue.12. See Figure 2. To the left of point A, the domestic firm faces higher long-run average costs of production (LAC D) than the foreign firm (LAC F). To theright of point A the opposite is the case.13.a) If the entries in the top left-hand corner of Table 9-5 were changed to +10,+10, then both Boeing and Airbus would produce the aircraft without anysubsidy, and so no strategic trade and industrial policy would be needed in theU.S. or Europe.b)If the entries in the top left-hand corner of Table 9-5 were changed to +5, +0,then both Boeing and Airbus would produce the aircraft without any subsidy, and so no strategic trade and industrial policy would be needed in the U.S. or Europe.*Note that even though Airbus only breaks even, in economics we includea normal return on investment as part of costs. Thus, Airbus wouldremain in business because it would earn a normal return on investment.c)If the entries in the top left-hand corner of Table 9-5 were changed to +5, -10,then both Boeing produces and Airbus does not produce without any subsidy.With a subsidy of at least $10 million per year, however, Airbus would enterthe market and lead to a loss of $100 million for Boeing unless the U.S.government would provide a subsidy of at least $5 million per year to Boeing.14. The answer to part (a) and (b) are presented in Appendix A9.3.App. 1. See Figure 3 on page 90.App. 2. In order to maximize to maximize total profits the domestic monopolist practicing international price discrimination should sell at theprice of P d=$20 in the domestic market and at the price of P f=$15 in theforeign market.App. 3. By imposing a 100% tax on the production of commodity X andgiving it as a subsidy to producers of commodity Y.Multiple-choice Questions:1. An import quota:a. increases the domestic price of the imported commodityb. reduces domestic consumptionc. increases domestic production*d. all of the above2. An increase in the demand of the imported commodity subject to a given import quota:a. reduces the domestic quantity demanded of the commodity*b. increases the domestic production of the commodityc. reduces the domestic price of the commodityd. reduces the producers' surplus3.Adjustment to any shift in the domestic demand or supply of an importablecommodityoccurs:a. in domestic price with an import quotab. in the quantity of imports with a tariffc. through the market mechanism with an import tariff but not with an import quota *d. all of the above4. An international cartel refers to:a. dumping*b. an organization of exportersc. an international commodity agreementd. voluntary export restraints5.The temporary sale of a commodity at below cost or at a lower price abroad in orderto drive foreign producers out of business is called:*a. predatory dumpingb. sporadic dumpingc. continuous dumpingd. voluntary export restraints6.The type of dumping which would justify antidumping measures by the countrysubject to the dumping is:*a. predatory dumpingb. sporadic dumpingc. continuous dumpingd. all of the above7. A fallacious argument for protection is:a. the infant industry argumentb. protection for national defense*c. the scientific tariffd. to correct domestic distortions8. Which of the following is true with respect to the infant-industry argument forprotection:a. it refers to temporary protection to establish a domestic industryb. to be valid, the return to the grown-up industry must be sufficiently high also to repay for the higher prices paid by domestic consumers of the commodity during the infancy periodc. is inferior to an equivalent production subsidy to the infant industry*d. all of the above9. Which of the following is false with respect to strategic trade policy?a. it postulates that a nation can gain by an activist trade policy*b. it is practiced to some extent by most industrial nationsc. it can easily be carried outd. all of the above10.Industrial policy refers to:a. an activist policy by the government of an industrial country to stimulate the development of an industryb. the granting of a subsidy to a domestic industry to stimulate the development of an industryc. the granting of a subsidy to a domestic industry to counter a foreign subsidy*d. all of the above11. Game theory refers to:*a. a method of choosing the optimal strategy in conflict situationsb. the granting of a subsidy to correct a domestic distortionc. the theory of tariff protectiond. none of the above12. Trade protection in the United States is usually provided to:a. low-wage workersb. well-organized industries with large employmentc. industries producing consumer products*d. all of the above13. The most-favored-nation principle refers to:*a. extension to all trade partners of any reciprocal tariff reduction negotiated by the U.S. with any of its trade partnersb. multilateral trade negotiationc. the General Agreement on Tariffs and Traded. the International Trade Organization14. On which of the following principles does GATT rest?a. nondiscriminationb. elimination of nontariff barriersc. consultation among nations in solving trade disputes*d. all of the above15. Which of the following was not negotiated under the Uruguay Round?a. reduction of tariffs on industrial goodsb. replacement of quotas with tariffsc. reduction of subsidies on industrial products and on agricultural exports*d. liberalization in trade in most services。

国际经济学作业任务答案解析-第九章Chapter 9 The Political Economy of Trade TheoryMultiple Choice Questions1. The efficiency case made for free trade is that as trade distortions such as tariffs aredismantled and removed,(a) government tariff revenue will decrease, and therefore national economicwelfare will decrease.(b) government tariff revenue will decrease, and therefore national economicwelfare will increase.(c) deadweight losses for producers and consumers will decrease, hence increasingnational economic welfare.(d) deadweight losses for producers and consumers will decrease, hence decreasingnational economic welfare.(e) None of the above.Answer: C2. The opportunity to exploit economies of scale is one of the gains to be made fromremoving tariffs and other trade distortions. These gains will be found by a decrease in(a) world prices of imports.(b) the consumption distortion loss triangle.(c) the production distortion loss triangle.(d) Both (b) and (c).(e) None of the above.Answer: E3. It is argued that special interest groups are likely to take over and promoteprotectionist policies, which may lead to an increase in national economic welfare.This argument leads to* * (a) a presumption that in practice a free trade policy is likely to be better thanalternatives.(b) a presumption that trade policy should be shifted to Non-GovernmentalOrganizations, so as to limit taxpayer burden.(c) a presumption that free trade is generally a second-best policy, to be avoided iffeasible alternatives are available.(d) a presumption that free trade is the likely equilibrium solution if the governmentallows special interest groups to dictate its trade policy.(e) None of the above.Answer: A* *4. The optimum tariff is(a) the best tariff a country can obtain via a WTO negotiated round of compromises.(b) the tariff, which maximizes the terms of trade gains.(c) the tariff, which maximizes the difference between terms of trade gains andterms of trade loses.(d) not practical for a small country due to the likelihood of retaliation.(e) not practical for a large country due to the likelihood of retaliation.Answer: E5. The optimum tariff is most likely to apply to(a) a small tariff imposed by a small country.(b) a small tariff imposed by a large country.(c) a large tariff imposed by a small country.(d) a large tariff imposed by a large country.(e) None of the above.Answer: B6. The prohibitive tariff is a tariff that(a) is so high that it eliminates imports.(b) is so high that it causes undue harm to trade-partner economies.(c) is so high that it causes undue harm to import competing sectors.(d) is so low that the government prohibits its use since it would lose an importantrevenue source.(e) None of the above.Answer: A7. The existence of marginal social benefits which are not marginal benefits for theindustry producing the import substitutes(a) is an argument supporting free trade and non-governmental involvement.(b) is an argument supporting the use of an optimum tariff.(c) is an argument supporting the use of market failures as a trade-policy strategy.(d) is an argument rejecting free trade and supportinggovernmental involvement.(e) None of the above.Answer: D* *8. The domestic market failure argument is a particular case of the theory of(a) the optimum, or first-best.(b) the second best.(c) the third best.(d) the sufficing principle.(e) None of the above.Answer: B* *9. The difficulty of ascertaining the right second-best trade policy to follow(a) reinforces support for the third-best policy approach.(b) reinforces support for increasing research capabilities of government agencies.(c) reinforces support for abandoning trade policy as an option.(d) reinforces support for free-trade options.(e) None of the above.Answer: D10. The authors of the text believe that(a) second-best policy is worse than optimal policy.(b) special interest groups generally enhance national welfare.(c) national welfare is likely to be enhanced by the imposition of an optimal tariff.(d) market Failure arguments tend to support free-tradepolicy.(e) there is no such thing as national welfare.Answer: E11. The simple model of competition among political parties long used by politicalscientists tends to lead to the practical solution of selecting the(a) optimal tariff.(b) prohibitive tariff.(c) zero (free-trade) tariff.(d) the tariff rate favored by the median voter.(e) None of the above.Answer: D12. The median voter model(a) works well in the area of trade policy.(b) is not intuitively reasonable.(c) tends to result in biased tariff rates.(d) does not work well in the area of trade policy.(e) None of the above.Answer: D* * 13. The fact that trade policy often imposes harm on large numbers of people, andbenefits only a few may be explained by(a) the lack of political involvement of the public.(b) the power of advertisement.(c) the problem of collective action.(d) the basic impossibility of the democratic system to reach a fair solution.(e) None of the above.Answer: C* *14. Protectionism tends to be concentrated in two sectors:(a) agriculture and clothing.(b) high tech and national security sensitive industries.(c) capital and skill intensive industries.(d) industries concentrated in the South and in the Midwest of the country.(e) None of the above.Answer: A15. Judging by the changes in the height of tariff rates in major trading countries, theworld has been experiencing a great(a) trade liberalization.(b) surge of protectionism.(c) lack of progress in the trade-policy area.(d) move towards regional integration.(e) None of the above.Answer: A16. The World Trade Organization (WTO) was organized as a successor to the(a) IMF.(b) UN.(c) UNCTAD.(d) GATT.(e) The World Bank.Answer: D17. The WTO was established by the ____________of multilateral trade negotiations.(a) Kennedy Round(b) Tokyo Round(c) Uruguay Round(d) Dillon Round(e) None of the above.Answer: C18. The Smoot-Hawley Tariff Act of 1930 has generally been associated with* *(a) falling tariffs.(b) free trade.(c) intensifying the worldwide depression.(d) recovery from the worldwide depression.(e) Non-tariff barriers.Answer: C* * 19. A trade policy designed to alleviate some domestic economic problem by exportingit to foreign countries is know as a(n)(a) international dumping policy.(b) countervailing tariff policy.(c) beggar thy neighbor policy.(d) trade adjustment assistance policy.(e) None of the above.Answer: C20. The General Agreement on Tariffs and Trade and the World Trade Organizationhave resulted in(a) termination of export subsidies applied to manufactured goods.(b) termination of import tariffs applied to manufactures.(c) termination of import tariffs applied to agricultural commodities.(d) termination of international theft of copyrights.(e) None of the above.Answer: E21. The General Agreement on Tariffs and Trade and the World Trade Organizationhave resulted in(a) the establishment of universal trade adjustment assistance policies.(b) the establishment of the European Union.(c) the reciprocal trade clause.(d) reductions in trade barriers via multilateral negotiations.(e) None of the above.Answer: D22. Trade theory suggests that Japan would gain from a subsidy the United Statesprovides its grain farmers if the gains to Japanese consumers of wheat productsmore than offsets the losses to Japanese wheat farmers. This would occur as long as Japan(a) is a net importer in bilateral trade flows with the United States.(b) is a net importer of wheat.(c) has a comparative advantage in wheat.* *(d) has an absolute advantage in producing wheat.(e) None of the above.Answer: B23. Countervailing duties are intended to neutralize any unfair advantage that foreignexporters might gain because of foreign(a) tariffs.(b) subsidies.(c) quotas.(d) Local-Content legislation.(e) None of the above.Answer: B* * 24. Throughout the post-World War II era, the importance of tariffs as a trade barrierhas(a) increased.(b) decreased.(c) remained the same.(d) fluctuated wildly.(e) demonstrated a classic random walk with a mean-reversion tendency.Answer: B25. In 1980 the United States announced an embargo on grain exports to the SovietUnion in response to the Soviet invasion of Afghanistan. This embargo was mainly resisted by(a) U.S. grain consumers of bread.(b) U.S. grain producers.(c) foreign grain producers.(d) U.S. communists.(e) None of the above.Answer: B26. Export embargoes cause greater losses to consumer surplus in the target country(a) the lesser its initial dependence on foreign produced goods.(b) the more elastic is the target country’s demand schedule.(c) the more elastic is the target country’s domestic supply.(d) the more inelastic the target country’s supply.(e) None of the above.Answer: D27. The strongest political pressure for a trade policy that results in higherprotectionism comes from(a) domestic workers lobbying for import restrictions.(b) domestic workers lobbying for export restrictions.(c) domestic workers lobbying for free trade.(d) domestic consumers lobbying for export restrictions.(e) domestic consumers lobbying for import restrictions.* * Answer: A28. The average tariff rate to data on dutiable imports in the United States isapproximately(a) 5 % of the value of imports.(b) 15% of the value of imports.(c) 20 % of the value of imports.(d) 25% of the value of imports.(e) more than 25% of the value of imports.Answer: A* * 29. In 1990 the United States imposed trade embargoes on Iraq’s international trade.This would induce smaller losses in Iraq’s consumer surplus the(a) less elastic Iraq’s demand schedule.(b) more elastic Iraq’s demand schedule.(c) greater is Iraq’s dependence on foreign products.(d) more inelastic is Iraq’s supply schedule.(e) None of the above.Answer: B30. The World Trade Organization provides for all of the following except(a) the usage of the most favored nation clause.(b) assistance in the settlement of trade disagreements.(c) bilateral tariff reductions.(d) multilateral tariff reductions.(e) None of the above.Answer: C31. Which organization determines procedures for the settlement of international tradedisputes?(a) World Bank(b) World Trade Organization(c) International Monetary Organization(d) International Bank for Reconstruction and Development(e) The League of NationsAnswer: B32. The WTO’s intervention against clean air standards(a) has earned it universal approval.(b) was done in order to limit national sovereignty.(c) has resulted in much criticism.(d) has resulted in much criticism among professional economists.(e) None of the above.Answer: C* *33. Under U.S. commercial policy, the escape clause results in(a) temporary quotas granted to firms injured by import competition.(b) tariffs that offset export subsidies granted to foreign producers.(c) a refusal of the U.S. to extradite anyone who escaped political oppression.(d) tax advantages extended to minority-owned exporting firms.(e) tariff advantages extended to certain Caribbean countries in the U.S. market.Answer: A* * 34. Under U.S. commercial policy, which clause permits the modification of a tradeliberalization agreement on a temporary basis if serious injury occurs to domestic producers as a result of the agreement?(a) Adjustment assistance clause(b) Escape clause(c) Most favored nation clause(d) Prohibitive tariff clause(e) None of the above.Answer: B35. Today U.S. protectionism is concentrated in(a) high tech industries.(b) labor-intensive industries.(c) industries in which Japan has a comparative advantage.(d) computer intensive industries.(e) capital-intensive industries.Answer: B36. The reason protectionism remains strong in the United States is that(a) economists can produce any result they are hired to produce.(b) economists cannot persuade the general public that free trade is beneficial.(c) economists do not really understand how the real world works.(d) the losses associated with protectionism are diffuse, making lobbying by thepublic impractical.(e) None of the above.Answer: D37. An issue never confronted effectively by GATT, but considered an important issuefor WTOis that of(a) the promotion of freer World trade(b) the promotion of freer World commodity trade(c) the promotion of freer World services trade(d) the lowering of tariff rates* *(e) None of the above.Answer: C38. The political wisdom of choosing a tariff acceptable to the median U.S. voter is(a) a good example of the principle of the second best.(b) a good example of the way in which actual tariff policies are determined.(c) a good example of the principle of political negotiation.(d) is not evident in actual tariff determination.(e) None of the above.Answer: D* * 39. A game-theory explanation of the paradox that even though all countries wouldbenefit if each chose free trade, in fact each tends to follow protectionist policies is(a) Trade war(b) Collective action(c) Prisoner’s dilemma(d) Benefit—Cost analysis(e) None of the above.Answer: C40. When the U.S. placed tariffs on French wine, France placed high tariffs on U.S.chickens. This is an example of:(a) deadweight losses(b) multilateral negotiations(c) bilateral trade negotiations(d) international market failures(e) none of the aboveAnswer: E41. The quantitative importance of U.S. protection of the domestic clothing industry isbest explained by the fact that(a) this industry is an important employer of highly skilled labor(b) this industry is an important employer of low skilled labor(c) most of the exporters of clothing into the U.S. are poor countries.(d) a politically well organized sector in the U.S.(e) None of the aboveAnswer: DEssay Questions* * 1. Developing countries have often attempted to establish cartels so as to counter theactual or perceived inexorable downward push on the prices of their exportedcommodities. OPEC is the best well known of these. How are such cartels expected to help the developing countries? At times importing countries profess support for such schemes. Can you think of any logical basis for such support? How are cartels like monopolies, and how are they different from monopolies. Why is there apresupposition among economists that such schemes are not likely to succeed in the long run?Answer: S uch cartels are expected to shift the exporters’ terms of trade in their favor. Also they are expected to produce the maximum profit, which themarket will bear. Importing countries may benefit from the price stabilitygenerated by the cartel. Cartels are like monopolies in that their totaloutput is the same as that which would be generated by a single monopoly.They differ from monopolies in that the monopoly profits need to bedivided among the producing countries, which have different coststructures.* * 2. The United States appears at times to have a totally schizophrenic attitude towardprotectionism. The United States was the country that proposed the establishment of the World Trade Organization as early as the late 1940s, and was also the only industrialized country that refused to ratify this at that time. The United States has consistently argued on the side of multinational free trade in GATT Rounds, and yet maintains many protectionist laws such as those which reserve oil shipments from Alaska to U.S. flag carriers. How can you explain this apparent lack of nationalconsistency on this issue?Answer: T his reflects the fact that international trade typically has many winners and relatively fewer, but politically powerful losers. Short of guaranteed(constitutional?) non-conditional compensatory mechanisms, the basicconflict between these two groups will always be there.3. Presumably, since the United States is a large country in many of its internationalmarkets, a positive optimum tariff exists for this country. It follows therefore that when any legislator or government official who promotes zero-tariff free tradepolicies, is by definition not acting in the public’s best interest. Discuss.Answer: T echnically this is true. However, this is true only within the context of a generally myopic view of international relations. If the tariff imposingcountry is large enough to make a substantial difference in its welfare byseeking an optimum tariff, then it cannot hope to remaininvisible, as itspolicies are substantially harming its trade partners. Foreign repercussionsare almost a certainty. In such a “game” it is not at all certain that seekingthe optimum tariff dominates alternative strategies.4. It may be demonstrated that any protectionist policy, which effectively shifts realresources to import competing industries or sectors will harm export industries or sectors. This may, for example, happen by the strengthening U.S. dollar in theforeign exchange market. Would you propose therefore that export industries lobby against protectionism in International Trade Commission proceedings? What ofconsumer advocates? Discuss the pros and the problems of such a suggestion.。