Unit 4 Chapter 34 Quiz Globalization and Protectionism

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 incomes 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''

________________________ 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''

____________ means selling goods below their cost of production

A. Protectionism B. Dumping C. Import quotas D. Non-tariff barriers ''B''

Which of the following would be expected if the tariff on foreign-produced automobiles were increased?

A. The domestic price of automobiles would fall. B. The supply of foreign automobiles to the domestic market would be reduced, causing auto prices to rise. C. The number of unemployed workers in the domestic automobile industry would rise. D. The demand for foreign-produced automobiles would increase, causing the price of automobiles to increase in other nations. ''B''

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

A. a tax placed on all small cars sold in the domestic market B. a limit imposed on the number of men's suits that can be imported from a foreign country C. a subsidy from the American government to domestic manufacturers of men's suits so they can compete more effectively with foreign producers of men's suits D. a $100-per-car fee imposed on all small cars imported ''B''

As international trade increases, it contributes to a shift in jobs away from industries where that economy does not have a(n) __________ advantage and toward industries where it has a(n) ___________ advantage.

A. absolute; absolute B. comparative; comparative C. comparative; competitive D. comparative; absolute ''B''

"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:

A. contains one error; the trade restraints do not increase the scarcity of foreign-produced goods. B. contains one error; domestic producers gain at the expense of foreign producers rather than domestic consumers. C. contains two errors; trade restraints do not increase the domestic scarcity of product and neither do they harm domestic consumers. D. is essentially correct. ''D''

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''

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 workers to apply for American jobs. D. protectionism will prevent them from applying for those jobs in other industries. ''B''