Question :
11) A business which contends that it needs temporary protection : 1384527
11) A business which contends that it needs temporary protection so that it can expand significantly and thereby reduce its costs so as to enable it to compete with foreign producers is using an argument known as the
A) infant-industry case for tariffs.
B) monopolistic competition case for tariffs.
C) strategic case for tariffs.
D) price fluctuations case for tariffs.
E) social advantages case for tariffs.
12) A common argument for the use of tariffs when the objective is to maximize a country’s national income would be to
A) improve the country’s terms of trade.
B) subject infant industries to the discipline of the market.
C) enjoy the advantages of diversification.
D) prevent learning-by-doing by potential trade partners.
E) increase the prices of domestic exports.
13) Many of the world’s industrialized countries initially developed their industries with heavy tariff protection. In Canada’s case, this was the basis for
A) the National Policy of 1876.
B) the National Energy Program of the 1980s.
C) reciprocity.
D) the NAFTA.
E) the Charlottetown Accord.
14) A country can impose a tariff to improve its own terms of trade if it
A) constitutes a large fraction of the world demand for some commodity that it imports.
B) has a high level of industrial diversification.
C) has a significant trade surplus.
D) imports mostly primary products.
E) produces and exports a large fraction of the world’s supply of some commodity.
15) A common, but invalid argument for using tariffs to maximize national income and raise domestic living standards is to
A) alter the terms of trade.
B) keep Canadian currency in Canada.
C) encourage learning by doing.
D) create a strategic trade advantage.
E) exploit economies of scale.
16) Continued tariff protection for industries that have already attained all potential economies of scale and possibilities for learning by doing is likely to
A) increase employment in the protected industries.
B) reduce average real income for the country’s residents.
C) redistribute income away from the factors used in the protected industries.
D) decrease prices to consumers of the products produced in the protected industries.
E) both A and B are correct.
17) Continued tariff protection for industries that have already attained all potential economies of scale and opportunities for learning by doing is likely to
A) reduce employment in the protected industries.
B) reduce the stream of tariff revenue to the government.
C) redistribute income in favour of the factors used in the protected industries.
D) decrease prices to consumers of the products produced in the protected industries.
E) result in increased demand for imports.
18) Continued tariff protection for industries that have already attained all the possible economies of scale will likely
A) reduce employment in the protected industries.
B) reduce the stream of tariff revenue to the government.
C) redistribute income away from the factors used in the protected industries.
D) maintain high prices to consumers of the products produced in the protected industries.
E) result in lower domestic prices for the products they produce.
19) If wages in Mexico are lower than those in Canada,
A) Canadian living standards can be raised by imposing tariffs on imports from Mexico.
B) Canadian consumers can benefit by purchasing some low-cost goods from Mexico.
C) Canada may have a comparative advantage in all products.
D) Mexico may have a comparative advantage in all products.
E) Mexico probably has an absolute advantage in all products due to its low labour costs.
20) Consider trade between country A and country B. If country A has wages that are substantially less than those in country B,
A) country A will have an absolute advantage over country B.
B) country A will not have to subsidize its export industries.
C) country B will import from A but will not be able to export to country A.
D) country B will benefit by placing tariffs on imports from country A.
E) the pattern of comparative advantage will depend also on the relative productivities of labour in the two countries.
