Econ: Ch. 6

What term is used to describe laws that block imports sold below the cost of production and impose tariffs that would increase the price of these imports to reflect their cost of production?

Anti-dumping laws

Which of the following characteristics relate to protectionism?

Government policies to reduce or block imports

Which of the following characteristics relate to dumping?

Selling internationally traded goods below their cost of production.

What term is used to describes the stipulation that a nation should not depend too heavily on other countries for supplies of certain key products?

The national interest argument

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.

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.

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

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.