Is your vet really aware of the problems of small dogs?  I would question them about collapsed trachea and see what they actually know about it.  Do your research here in the search function, and go armed and ready.  Also, call around and try to find a vet who sees a lot of yorkies.  They will know what's up.
 
Good luck, and come back and let us know how it all turns out!

  Poor little one...