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International Economics
Exam 2
7
Economics
Undergraduate 3
07/22/2011

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Term
Specific Tariff
Definition
A tax of 20 cents per UNIT of imported cheese is an example of...
Term
Ad Valorem Tariff
Definition
A tax of 15 percent per ITEM would be an example of...
Term
Redistribution Effect (of import tariff)
Definition
Transfer of income from the domestic buyers to domestic producers of the good
Term
Nationally optimal Tariff
Definition
The highest difference between the part of the tariff revenue paid by the exporting country and the welfare loss associated with the consumption and production effects is attained.
Term
Non-tariff barrier
Definition
Operates by 1.) Limiting the quantity of imports
2.) Increasing the cost of getting imports to market
3.) Creating uncertainty about the conditions under which imports will be permitted
Term
first best world
Definition
free trade is economically efficient
Term
second best world
Definition
spillover effects, externalities, and incentive distortions.
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