All Free Economics MCQs with Answers
Every Economics question in the bank, across all chapters, each with the correct answer and a written explanation. Free and unlimited, with no account needed.
4,037 questions · page 150 of 202
- A. domestic content laws
- B. government procurement policies
- C. health, safety, and environmental standards
- D. antidumping/countervailing duties applied to imports
Explanation: Domestic-content rules, procurement restrictions, and product standards can restrict trade without directly imposing tariffs.
Correct answer: antidumping/countervailing duties applied to imports- A. export quota
- B. embargo
- C. auction quota
- D. tariff quota
Explanation: Under an export quota, the exporting country restricts the quantity shipped abroad, and foreign exporters may hold the valuable quota…
Correct answer: export quota- A. quota licenses are given to foreign exporting companies
- B. quota licenses are auctioned to the highest bidding importing company
- C. if quota licenses are given to domestic consumers of the good
- D. Both A and C
Explanation: Quota restrictions create quota rents because importers can buy goods at the lower world price and sell them at the higher domestic price.
Correct answer: quota licenses are auctioned to the highest bidding importing company- A. who has the quota license
- B. the size of the quota
- C. elasticities of domestic demand and supply
- D. All of the above
Explanation: Quota welfare effects depend on the quota's size, the demand and supply elasticities, and who receives the quota rents.
Correct answer: All of the above- A. embargoes
- B. voluntary export restraints
- C. nontariff barriers
- D. orderly marketing agreements
Explanation: An embargo is a complete prohibition on trade in a good or with a country, so it represents a quota of zero.
Correct answer: embargoes- A. Orderly marketing
- B. trigger pricing
- C. domestic content pricing
- D. dumping
Explanation: Selling goods abroad at prices below those charged in the home market is price discrimination known as dumping.
Correct answer: dumping- A. always
- B. often
- C. seldom
- D. never
Explanation: Governments seldom auction quota licenses; they commonly allocate them administratively or grant them to domestic firms.
Correct answer: seldom2988. To maintain that South koreans are dumping their DVDs in the United States is to maintain that ?
- A. Koreans are selling DVDs in the U.S below their production cost
- B. Koreans are selling DVDs is the U.s above their productions cost
- C. The cost of manufacturing DVDs in Korea is lower in Korea than in the U.S since wages are lower in Korea
- D. The cost of manufacturing DVDs in Korea is higher in Korea than in the U.S since wages are higher in Korea
Explanation: Dumping means selling a product in a foreign market at an unfairly low price, commonly defined in basic trade analysis as below its…
Correct answer: Koreans are selling DVDs in the U.S below their production cost- A. domestic producers of the imported good being harmed
- B. domestic consumers of the imported good being harmed
- C. Prices increasing in the importing country
- D. Prices falling in the exporting country
Explanation: An import quota restricts foreign supply, raising the domestic price and benefiting protected domestic producers while harming consumers.
Correct answer: domestic producers of the imported good being harmed- A. foreign corporations
- B. foreign workers
- C. domestic corporations
- D. The domestic government
Explanation: When import licences are auctioned competitively, the scarcity rent is captured by whoever sells the licences.
Correct answer: The domestic government- A. is less restrictive on a country's imports than a tariff
- B. Is more restrictive on a country's imports than a tariff
- C. has the same restrictive effect on a country's imports as a tariff
- D. will always generate increased tax revenue for the government
Explanation: A quota fixes the physical quantity of imports, so it becomes more restrictive as domestic demand grows and pushes up the domestic price.
Correct answer: Is more restrictive on a country's imports than a tariff- A. increase, increase
- B. increase, decrease
- C. decrease, increase
- D. decrease, decrease
Explanation: A binding quota reduces imports and raises Norway's domestic price relative to free trade.
Correct answer: decrease, increase- A. offset the margin of dumping
- B. punish domestic consumers for buying high-priced imported goods
- C. discourage foreign governments from subsidizing their exporters
- D. reduce the tariff revenue of the domestic government
Explanation: An antidumping duty is set to offset the dumping margin, typically the difference between the foreign product's normal value and its…
Correct answer: offset the margin of dumping2994. In a tariff and import quota lead to equivalent increase in the domestic price of steel, then ?
- A. The quota results in efficiency reductions but the tariff does not
- B. The tariff results in efficiency reductions but the quota does not
- C. They have identical impact on how much is produced and consumed
- D. They have identical impact on how income is distributed
Explanation: If a tariff and quota raise the domestic price by the same amount, they produce the same domestic quantity supplied and quantity demanded.
Correct answer: They have identical impact on how much is produced and consumed2995. If a tariff and import quota lead to equivalent increases in the domestic price of steel, then ?
- A. the quota results in efficiency reductions but the tariff does not
- B. The tariff results in efficiency reductions but the quota does not
- C. They have different impacts on how much is produced and consumed
- D. They have different impacts on how income is distributed
Explanation: A tariff and quota can produce the same domestic price, output, and consumption, so their efficiency effects are similar.
Correct answer: They have different impacts on how income is distributed- A. Prisoner's Dilemma
- B. Monopoly Cell
- C. Jailhouses Sentences
- D. Jury Box
Explanation: The Prisoner's Dilemma is a standard game-theory model showing how individually rational choices can produce a worse collective outcome.
Correct answer: Prisoner's Dilemma- A. Rs 85
- B. Rs 75
- C. Rs 80
- D. Rs 60
Explanation: With separate pricing, the profit-maximizing prices are Rs60 for the textbook and Rs15 for the guide, giving a combined price of Rs75.
Correct answer: Rs 75- A. has a legitimate purpose of stopping discount retailers from free riding on the services provided by full services retailers?
- B. is price fixing and, therefore is prohibited by law
- C. is price fixing and therefore, is prohibited by law and enhances the market power of the producer
- D. enhances the market power of the producer
Explanation: Supporters of resale price maintenance argue that it prevents discount retailers from free riding on services such as demonstrations and…
Correct answer: has a legitimate purpose of stopping discount retailers from free riding on the services provided by full services retailers?- A. output in the market tends to fall because each firm must cut back on production
- B. the price in the market moves further from marginal cost
- C. collusion is more likely to occur because a larger number of firms can place pressure on any firm that defects
- D. The price in the market moves closer to marginal cost
Explanation: As more firms enter an oligopoly, competition generally becomes stronger and the market outcome approaches perfect competition.
Correct answer: The price in the market moves closer to marginal cost- A. more than the level produced by a monopoly and less than the level produced by a competitive market
- B. less than the level produced by a monopoly and more than the level produced by a competitive market
- C. less than the level produce by either monopoly or a competitive market
- D. more than the level produced by either monopoly or a competitive market
Explanation: An oligopolist recognizes that expanding output affects the market price, so it produces more than a monopolist but less than firms in a…
Correct answer: more than the level produced by a monopoly and less than the level produced by a competitive market