Question : 41) Canada a net importer of durable consumer goods (washing : 1384530

41) Canada is a net importer of durable consumer goods (washing machines, refrigerators, etc.). If Canada initially has no tariffs and it then imposes a 10% tariff on these goods, we would expect to observe

A) a reduction in the production of the commodity in Canada.

B) an upward shift in the commodity’s supply curve.

C) an upward shift in the commodity’s demand curve.

D) a downward shift in the commodity’s demand curve.

E) an increase in the tariff revenue collected by the Canadian government.

42) Suppose Canada reduces a tariff on imported solar panels from 20% to 5%. We would expect to observe

A) a reduction in the quantity consumed of solar panels in Canada.

B) a reduction in the quantity imported of solar panels.

C) an upward shift in the demand curve for solar panels.

D) a downward shift in the demand curve for solar panels.

E) an increase in quantity consumed of solar panels in Canada.

43) Suppose Canada reduces a tariff on imported solar panels from 20% to 5%. We would expect to observe

A) an increase in Canada’s terms of trade.

B) an increase in tariff revenue by the Government of Canada.

C) an upward shift in the demand curve for solar panels.

D) an increase in the number of solar panels imported into Canada.

E) a downward shift in the demand curve for solar panels.

44) If Canada reduces the tariff imposed on a commodity from 10% to 5%, we would expect to observe

A) a reduction in the quantity consumed of the commodity in Canada.

B) a reduction in the quantity produced of the commodity in Canada.

C) an upward shift in the commodity’s demand curve.

D) a downward shift in the commodity’s demand curve.

E) an increase in quantity produced of the commodity in Canada.

45) A $1 per-litre tariff on all wine imported into Canada will

A) equally protect the production of all Canadian wines.

B) protect the production of expensive wines more than cheaper wines.

C) protect the production of cheaper wines more than expensive wines.

D) provide no protection at all to the Canadian wine industry.

E) create an incentive to produce better quality wines.

46) A 10% tariff on all wines imported into Canada will

A) equally protect the production of all Canadian wines.

B) protect the expensive wines more than the cheaper wines.

C) protect the cheaper wines at the expense of the expensive wines.

D) provide no protection at all to the Canadian wine industry.

E) create the incentive to produce better quality wines.

47) Suppose that lumber, a homogeneous product, is exported from Canada at the current world price. If Canada imposes a 25% tariff on imported lumber, we would expect to observe

A) an increase in revenues for foreign lumber producers.

B) a decrease in domestic consumption and an increase in domestic production.

C) no change in the domestic consumption or production of lumber.

D) an increase in tariff revenues for the Canadian government.

E) a decrease in tariff revenues for the Canadian government.

48) Suppose that at the current world price bananas are imported into Canada. Suppose also that domestic supply is perfectly inelastic and domestic demand has unit elasticity. If Canada were to place a tariff on imported bananas, the

A) revenues of the foreign exporters of bananas would rise.

B) quantity imported would be unaffected.

C) quantity imported would rise.

D) price of bananas in Canada would rise, but total domestic expenditures would fall.

E) price of bananas in Canada would rise, but total domestic expenditures would be unaffected.

49) If a country is small in world markets and imports some product at the world price, the country effectively faces a horizontal foreign supply curve for that product. If the country then restricts the volume of imports by imposing an import quota, the effect on the domestic market for that product is to

A) shift the entire supply curve to the left.

B) make the domestic demand curve a horizontal line at the permitted quantity of imports.

C) make the domestic demand curve a vertical line at the permitted quantity of imports.

D) make the foreign supply curve a vertical line determined by the permitted quantity of imports.

E) make the foreign supply curve a horizontal line at the current price.

50) Refer to Figure 34-1. The free-market equilibrium price of refrigerators in Canada is P0, implying that P0 is the

A) tariff-protected price.

B) quota-induced price.

C) cartel-induced price.

D) world price.

E) Canadian autarkic price.