Micro, Chapter 6

Which of the following characteristics relate to protectionism?

Government policies to reduce or block imports.

It is sometimes argued that nation should not depend too heavily on other countries for supplies of certain key products. This argument is commonly know as the _______________.

National Interest Argument

What is meant by import quotas?

Numerical limitations on the quantity of products that can be imported.

Which of the following characteristics relate to dumping?

Selling internationally traded goods below their cost of production.

What term is used to describe taxes imposed on imported products?

Tariffs

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

The supply of foreign automobiles to the domestic market would be reduced, causing auto prices to rise.

What is meant by race to the bottom?

When production locates in countries with the lowest environmental (or other) standards, putting pressure on all countries to reduce their environmental standards.

Politicians often argue for tariff increases in order to reduce the nation's dependence on imports. If tariffs are increased, the long-run effect is most likely to be:

a decrease in both American imports and exports.

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

A tariff differs from a quota in that a tariff is:

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

Suppose the government of Taiwan subsidized its watch-making industry, enabling Taiwanese producers to undersell foreign watch producers. The law of comparative advantage indicates that watch-importing nations would best take advantage of the Taiwanese subsidization policy by:

accepting the subsidy of the Taiwanese government, making the appropriate adjustment for the resources temporarily displaced from the domestic watch-making industry.

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

comparative; comparative

During the second half of the twentieth century, trade barriers have in general:

declined quite substantially both in the U.S. economy and in the global economy.

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.

Which of the following is not a short-run impact of imposing quotas on the American industries they seek to protect?

government tax revenues increase

An import quota or tariff on French wine that raises the prices for wine will probably:

hurt domestic wine drinkers but help domestic wineries, which will gain from the higher prices.

Low-wage U.S. workers suffer from protectionism in all the industries that they don't work in, because:

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

Tariffs result in a decrease in consumer surplus because:

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

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:

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

International trade is fundamentally a ________________________.

win-win situation.