Question : 51.Which of the following statements with regard to subsidies true? : 1299309

51.Which of the following statements with regard to subsidies is true?  

A. The main gains from subsidies accrue to domestic producers, whose international competitiveness is increased as a result.

B. Pharmaceutical industry tends to be one of the largest beneficiaries of subsidies in most countries.

C. Subsidies always generate national benefits that exceed their national costs.

D. Subsidies comprise only of cash grants and low-interest loans.

E. Subsidies never help a firm achieve a first-mover advantage in an emerging industry.

52.Which of the following groups would benefit the most from receiving subsidies?  

A. Governments

B. International organizations such as the WTO

C. Domestic producers

D. Importers

E. Foreign competitors

53.Which of the following statements is true about import quotas?  

A. Import quotas benefit domestic producers by limiting import competition.

B. If a domestic industry lacks the capacity to meet demand, an import quota can raise the prices for domestically produced good but not the imported good.

C. Under an import quota, a lower tariff rate is applied to imports within the quota than those over the quota.

D. Import quotas benefit consumers by decreasing the domestic price of an imported good.

E. An import quota helps a foreign producer in gaining a competitive advantage in the markets of the country which imposes the quota.

54.Under a(n) _____, a lower tariff rate is applied to imports within the quota than those over the quota.  

A. tariff rate quota

B. voluntary import restraint

C. import duty

D. quota rent

E. import quota

55.The country of Argonia imposes an ad valorem tariff of 10 percent on 1 million tons of rice imports, after which an out-of-quota tariff of 80 percent is applied. According to this information, which of the following trade policy instruments is being used by Argonia?  

A. Subsidy

B. Tariff rate quota

C. Voluntary export restraint

D. Tariff ceiling

E. Local content requirement

56.A(n) _____ is a quota on trade imposed by the exporting country, typically at the request of the importing country’s government.  

A. tariff rate quota

B. quota rent

C. voluntary export restraint (VER)

D. quota share

E. export embargo

57.Which of the following statements is true about voluntary export restraints (VERs)?  

A. VERs benefit consumers by limiting import competition.

B. VER reduces the domestic price of an imported good.

C. When imports are limited to a low percentage of the market by a VER, the price is bid up for that limited foreign supply.

D. Foreign producers agree to VERs because they fear economic instability in the world economy.

E. VERs negatively affect domestic producers by increasing import competition.

58.The extra profit that producers make when supply is artificially limited by an import quota is referred to as a:  

A. net profit.

B. quota rent.

C. trade surplus.

D. profit margin.

E. quota share.

59.Both import quotas and VERs benefit _____ by limiting import competition, but they result in higher prices, which hurt _____.  

A. domestic producers; consumers

B. the governments; domestic producers

C. importers; foreign producers

D. foreign producers; the governments

E. consumers; foreign investros

60.A(n) _____ requires that some specific fraction of a good must be produced domestically.  

A. international allocation requirement

B. local content requirement

C. specific quota requirement

D. ad valorem portion requirement

E. Domestic sales requirement