ECON-2301-012, PREVIEW OF EXAM 2

Which of the following is the best example of a quota?

A limit imposed on the number of men's suits that can be imported from a foreign country

The infant industry argument for protectionism suggests that an industry must be protected in the early stages of its development so that:

Domestic producers can attain the economies of scale to allow them to compete in world markets.

A new American import quota on imported steel would be likely to:

Increase American production of steel.

What term is used to describe all the ways a nation can draw up rules, regulations, inspections, and paperwork to make it more costly or difficult to import products?

No tariff barriers

What is meant by race to the bottom?

When production locates

"Tariffs and other trade restrictions increase the domestic scarcity of products from abroad. Such policies benefit domestic producers of the restricted products at the expense of domestic consumers." This statement:

is essentially correct.