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Non-Tariff Trade Barriers MCQs

Free 46+ Non-Tariff Trade Barriers MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Practise below with answers and explanations.

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46 questions in this list. Select an option to practice, or open a question for the full page with explanation.

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Non-Tariff Trade Barriers

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1.Which U.S. company would be most affected by Brazil selling steel at below-market prices in the American market?

General Motors, a car manufacturing companyTennessee Mining Co., a company that extracts iron oreCaterpillar Corp, a manufacturer of heavy machinerySneva Construction Co., a firm specializing in high-rise buildings

2.Which type of quota limits the quantity of goods that can be imported annually without restricting the source country or the authorized importers?

limit on importsrestriction on exportsselective import quotaoverall import quotanone of the above

3.Based on the cost-based definition, dumping happens when a company exports a product at a price lower than which of the following?

the average total costthe average variable costthe average fixed costthe marginal cost

4.Which type of dumping is associated with the highest possible net welfare loss for the importing country?

Predatory dumpingOccasional dumpingContinuous dumpingEnd-of-year dumping

5.Which policy restricts outsourcing by mandating that a certain portion of a product's value be manufactured within the country to qualify for sale in the domestic market?

government subsidy for local industriesmutual export limitation agreementlocal content mandatequota with variable tariff ratesimport licensing requirement

6.What is the impact of a production subsidy provided to a producer competing with imported goods?

It does not need government tax revenue for funding.It causes an identical deadweight loss in welfare as an import tariff or quota.It results solely in deadweight loss due to consumption changes.It leads exclusively to deadweight loss arising from protectionist effects.

7.Which of the following scenarios can be associated with international dumping?

Offering products to foreign buyers at prices lower than those for local customersExporting goods at prices beneath the manufacturing costImposition of antidumping tariffs on the imported goods sold below fair valueAll of the above

8.How frequently do governments worldwide auction quota licenses?

not at allrarelyfrequentlyin all casessometimes

9.What term describes the earnings gained by the party holding the authorization to import goods limited by a quota?

import licensequota rentsquota feesno correct answertrade tariffs

10.Like import tariffs, what is the typical effect of import quotas on the market?

Elevated prices and a decline in import quantitiesGrowth in government incomeAn increase in consumer benefitsA reduction in the gains of producers

11.Quotas refer to government-enforced restrictions on the _________ of goods exchanged between nations.

pricingvolumeincomeexpensestariffs

12.For several years, the U.S. government imposed limits on the amount of low-cost oil imported from the Middle East. These restrictions resulted in an additional $3 billion in costs for American consumers of oil products. What was the main rationale behind implementing this policy?

American oil companies and their employees deserved increased earnings.Domestic oil was of higher quality and justified a premium price.It is important to avoid excessive reliance on foreign sources for vital resources.The government required quota revenues to help offset its budget deficit.To encourage the development of alternative energy sources within the U.S.

13.When the government of a country provides a subsidy for a good produced domestically, what is the typical response of domestic producers?

They convert the subsidy entirely into greater profitsThey raise their production outputThey lower the wages paid to local employeesThey treat the subsidy as an added cost to production

14.What is the term for a limit set on the quantity of a foreign-made product permitted to be imported into a country within a specified timeframe?

subsidy for local producersfinancial aid for exportsimport restriction limitlimit on goods exportedtrade tariff

15.How do export subsidies provided by foreign governments on goods where Pakistan has a comparative disadvantage affect Pakistan?

They reduce the overall well-being of the Pakistani populationThey result in an increase in consumer surplus for Pakistani buyersThey motivate Pakistan to produce more of the competing productsThey prompt Pakistani laborers to seek higher wagesThey improve Pakistan’s export competitiveness in those goods

16.Assuming free trade allows the global market to provide calculators to Canada at a price of $30, how many calculators will Canada import, and how will consumer surplus change compared to a no-trade scenario? What is the magnitude of the consumer surplus change? Use the relevant graph you have drawn to determine your answer.

Imports rise by 20 calculatorsImports fall by 25 calculatorsImports rise by 25 calculatorsImports rise by 30 calculatorsImports fall by 30 calculators

17.Why is dumping occurring in the case of ABC Co’s computers? The demand curve in Japan is _ because there are _ alternatives from foreign countries.

more elastic in Japan, due to the greater availability of substitutes from abroadmore elastic in Japan, because there are fewer alternatives from other countriesmore inelastic in Japan, since more substitutes exist from foreign sourcesmore inelastic in Japan, owing to the limited substitutes from other nations

18.How do export subsidies imposed by foreign governments on products sold to the United States affect the American public overall?

They provide greater benefits than drawbacksThey cause more harm than goodThey function similarly to an import restrictionThey act like an export limitation

19.Assuming free trade allows Norway to import computers from the rest of the world at a price of $1,500, what will be the quantity of computers imported by Norway? Compared to the situation without trade, how will Norway's consumer surplus and producer surplus change? Use the data to plot a graph and determine these values.

1,600 units imported, consumer surplus falls, producer surplus rises1,600 units imported, consumer surplus rises, producer surplus falls1,200 units imported, consumer surplus declines, producer surplus grows1,200 units imported, consumer surplus increases, producer surplus decreases

20.What total profit does the company earn by implementing price discrimination?

$160,000$420,000$540,000$660,000

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