1. True or False: Optimal tariffs are an effective means of improving a nation's trade balance
2. True or False. Explain: Assume 1990 to be the base year. If by the end of 2004 a country's export price index rose from 100 to 130 while its import price index rose from 100 to 115, its terms of trade would equal 113.
3. True or False: If quotas are administered by exporting nations, the net welfare loss to the importing nation includes the productive, consumption and revenue effect.
4. True or False: A small country's subsidy of an export good will drive down the world price of the good.
5. True or False: Tariffs, unlike quotas, promote a domestic firm's monopoly power.