ECO213 Quiz #6

Which of the following is not true regarding the argument for protection as a way of maintaining jobs and wage levels?

It is not possible that the U.S. wages, even when supported by high U.S. output per worker, can render U.S. products competitive with low-wage countries.

Which of the following is not correct concerning predatory dumping?

There are a great number of documented cases of predatory dumping.

A tariff is a tax on either imports or exports.

True

Ad valorem tariffs on imports are based on a percentage of an imports value; specific tariffs are based on a lump sum per physical unit imported.

True

Dumping refers to selling a commodity abroad at a price that is below its cost of production or below the price charged in the domestic market.

True

In order to qualify for unemployment insurance and workers compensation, a person must have

an employment record

The World Trade Organization (WTO)

became, in 1995, the institutionalized and more comprehensive successor to the General Agreement on Tariffs and Trade (GATT)

A major difference between social insurance and income assistance programs is that

benefits from social insurance programs are related to a workers contributions to the programs, whereas benefits from income assistance programs are not

Measured in dollar terms, the two largest U.S. antipoverty programs are

cash transfers and medical care

Temporary Assistance for Needy Families and Supplemental Security Income are

cash transfers for income assistance

Social Security was established

in the 1930s to provide retirement income to those with a work history

The official poverty definition in the U.S. is having an income that

is less than three times the cost of a nutritionally adequate yet frugal diet

An effective import quota

lowers the quantity demanded of the imported good

A country should export only those goods for which, relative to its trading partners, it has the

lowest opportunity cost

Absolute advantage

means that a country can produce more of two goods than another country can

Comparative advantage is determined by

the opportunity cost of producing any good