Chapter 34 Quiz Globalization and Protectonism

Tariffs result in a decrease in consumer surplus because: A.) the price and the quantity consumed of the protected good increases. B.) the price and the quantity consumed of the protected good decreases. C.) the price of the protected good increases and quantity consumed decreases. D.) the price of the protected good decreases and quantity consumed increases.

C.) the price of the protected good increases and quantity consumed decreases.

A tariff differs from a quota in that a tariff is: A.) levied on imports, whereas a quota is imposed on exports. B.) levied on exports, whereas a quota is imposed on imports. C.) a tax levied on exports, whereas a quota is a limit on the number of units of a good that can be exported. D.) a tax imposed on imports, whereas a quota is an absolute limit to the number of units of a good that can be imported.

D.) a tax imposed on imports, whereas a quota is an absolute limit to the number of units of a good that can be imported.

An import quota or tariff on French wine that raises the prices for wine will probably: A.) hurt domestic wine drinkers but help domestic wineries, which will gain from the higher prices. B.) hurt both domestic wine drinkers and domestic wineries, but this will be more than offset by a reduction in driving fatalities. C.) hurt both domestic wine drinkers and domestic wine producers because of a reduction in competition. D.) hurt domestic wineries, which will lose business as a result of the higher prices.

A.) hurt domestic wine drinker but help domestic wineries, which will gain from the higher prices.

Tariffs are taxes imposed on __________________________. A.) imported products B.) exported products C.) hazardous goods D.) surplus goods

A.) imported products

__________________________ means selling goods below their cost of production. A.) Protectionism B.) Dumping C.) Import quotas D.) Non-tariff barriers

B.) Dumping

_________________________ are numerical limitations on the quantity of products that can be imported. A.) Tariffs B.) Import quotas C.) Taxes D.) Nontariff barriers

B.) Import quotas

___________________________ is theoretically possible, even sensible: give an industry a short-term indirect subsidy through protection, and then reap the long-term economic benefits of having a vibrant healthy industry. A.) Opportunity cost B.) The infant industry argument C.) Dumping D.) Import quotas

B.) The infant industry argument

The infant industry argument for protectionism suggests that an industry must be protected in the early stages of its development so that: A.) firms will be protected from subsidized foreign competition. B.) domestic producers can attain the economies of scale to allow them to compete in world markets. C.) there will be adequate supplies of crucial resources in case they are needed for national defence. D.) it will not be subjected to a takeover from a foreign competitor.

B.) domestic producers can attain the economies of scale to allow them to compete in world markets.

Low-wage U.S. workers suffer from protectionism in all the industries that they don't work in, because: A.) protectionism provides a barrier to entry to the job markets that the low-wage earners want entry to. B.) protectionism forces them to pay higher prices for basic necessities like clothing and food. C.) protectionism will encourage foreign worker to apply for American jobs. D.) protectionism will prevent them from applying for those jobs in other industries.

B.) protectionism forces them to pay higher prices for basic necessities like clothing and food.

If Japan does not have a comparative advantage in producing rice, the consequences of adopting a Japanese policy reducing or eliminating imports of rice into the country would include: A.) Japan will be able to consume a combination of rice and other goods beyond their domestic production possibilities curve. B.) the real incomes of Japanese rice producers would rise, but the real incomes of Japanese rice consumers would fall. C.) the real income of Japanese rice consumers would rise, but the real incomes of Japanese rice producers would fall. D.) the price of rice in Japan will fall.

B.) the real incomes of Japanese rice producers would rise, but the real incomes of Japanese rice consumers would fall.