11.Countriesthatrestrictforeigntradearelikelyto
a.forgotheadditionalsurplusthattradeallows,butwillprobablyenjoyeconomiesofscale.
b.forgotheadditionalsurplusthattradeallows,butwillbecompensatedbyahigherrateoftechnologicalchange.
c.forgotheadditionalsurplusthattradeallows,butwillhavealowerrateofunemployment.
d.havemorefirmswithdomesticmarketpower.
12.OpponentsoffreetradeoftenwanttheUnitedStatestoprohibittheimportofgoodsmadeinoverseasfactoriesthatpaywagesbelowtheU.S.minimumwage.Prohibitingsuchgoodsislikelyto
a.causethesefactoriestopaytheU.S.minimumwage.
b.increasetherateoftechnologicaladvanceinpoorcountriessothattheycanaffordtopayhigherwages.
c.increasepovertyinpoorcountriesandbenefitU.S.firmswhichcompetewiththeseimports.
d.harmU.S.firmswhichcompetewiththeseimports.
13.Severalargumentsforrestrictingtradehavebeenadvanced.Thoseargumentsdonotinclude
a.thejobsargument.
b.theprotection-as-a-bargaining-chipargument.
c.theno-deadweight-lossargument.
d.theinfant-industryargument.
14.Criticsoffreetradesometimesarguethatallowingimportsfromforeigncountriescausesareductioninthenumberofdomesticjobs.Aneconomistwouldarguethat
a.foreigncompetitionmaycauseunemploymentinimport-competingindustries,buttheeffectistemporarybecauseotherindustries,especiallyexportingindustries,willbeexpanding.
b.foreigncompetitionmaycauseunemploymentinimport-competingindustries,buttheincreaseinconsumersurplusduetofreetradeismorevaluablethanthelostjobs.
c.thecriticsarecorrect,socountriesmustprotecttheirindustrieswithtariffsorquotas.
d.foreigncompetitionmaycauseunemploymentinimport-competingindustries,buttheincreaseinthevarietyofgoodsconsumerscanchoosefromismorevaluablethanthelostjobs.
15.Whichofthefollowingisnotacommonly-advancedargumentfortraderestrictions?
a.thejobsargument
b.thenational-securityargument
c.theinfant-industryargument
d.theefficiencyargument
16.Workersdisplacedbytradeeventuallyfindjobsin
a.anothercountry.
b.thegovernmentsector.
c.theindustriesinwhichthecountryhasacomparativeadvantage.
d.adifferentcompanyinthesameindustry.
17.Theinfant-industryargument
a.isbasedonthebeliefthatprotectingindustrieswhentheyareyoungwillpayofflater.
b.isbasedonthebeliefthatprotectingindustriesproducinggoodsandservicesforinfantsisnecessaryifacountryistohavehealthychildren.
c.hasthesupportofmosteconomists.
d.isanargumentthatisadvancedbyadvocatesoffreetrade.
18.Whichofthefollowingisthemostaccuratestatement?
a.Protectionisnecessaryinorderforyoungindustriestogrowupandbesuccessful.
b.Protectionisnotnecessaryforanindustrytogrow.
c.Protectionisnecessarybecauseifyoungindustriesarenotprotected,theymaysufferlosses.
d.Protectionmaynotalwaysbenecessaryforinfantindustries,butithasproventobeusefulinmostcases.
19.IftheKoreansteelindustrysubsidizesthesteelthatitsellstotheUnitedStates,the
a.UnitedStatesshouldprotectitsdomesticsteelindustryfromthisunfaircompetition.
b.harmdonetoU.S.steelproducersfromthisunfaircompetitionexceedsthegaintoU.S.consumersofcheapKoreansteel.
c.harmdonetoU.S.steelproducersislessthanthebenefitthataccruestoU.S.consumersofsteel.
d.UnitedStatesshouldsubsidizetheproductsitsellstoKorea.
20.Thetwobasicapproachesthatacountrycantakeasameanstoachievefreetradearethe
a.unilateralapproachandthemultilateralapproach.
b.short-runapproachandthelong-runapproach.
c.continentalapproachandtheglobalapproach.
d.industryapproachandthesecurityapproach.
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