Situation 32-1 In the early 1980s, the U.S. automobile industry managed to influence the government to negotiate a voluntary export restraint agreement with Japan that was in effect from 1981 until 1985. The predictable result was an average increase in the price of Japanese cars by about $1,000 and of U.S. cars by about $370. Also, as a result of the import quotas, 26,000 new jobs were "created"
in the U.S. automobile industry. Refer to Situation 32-l. At the time the total yearly salary (including all the benefits) of the average auto worker was no more than $50,000 per year, and the cost per job saved was estimated at $160,000 per worker per year. We can conclude that
A) import quotas are a cost-efficient way of saving jobs.
B) the U.S. auto industry, through its lobbying efforts, managed to promote the general public interest.
C) the net social benefits of import quotas were positive.
D) all of the above
E) none of the above
E
You might also like to view...
Collusion makes firms better off because if they act as a single entity (a cartel) they can reduce output and increase their prices and profits. But some cartels have failed and others are unstable
Which of the following is a reason why cartels often break down? A) Most cartels do not have a dominant strategy. B) Each member of a cartel has an incentive to "cheat" on the collusive agreement by producing more than its share when everyone else sticks with the collusive agreement. C) Members of a cartel may resent having to share their profits equally. D) When a cartel is profitable the amount of competition it faces increases.
Between 1860 and 1910, the labor force in agriculture
(a) dwindled to historic lows. (b) decreased at a slow steady pace. (c) increased but not at the same rate as the total labor force. (d) stayed the same.