Which of the following statements is correct?
A. In a first-best world, imports would not cause import-competing firms to go out of business and workers in these industries to lose their jobs.
B. In a first-best world, if rising import competition is driving domestic producers out of business, the government must intervene to protect the domestic firms.
C. The most efficient policy to maintain production in import-competing industries is to impose barriers on imports.
D. If we want to help workers who lose jobs when a domestic industry shrinks, the specificity rule suggests that the government should provide subsidies to those workers to retrain or to relocate to areas where jobs are available.
Answer: D
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In 2012, consumers in Dexter consumed only books and pens. The prices and quantities for 2012 and 2013 are listed in the table above. The reference base period for Dexter's CPI is 2012. What is the cost of the CPI basket in 2013?
A) $430 B) $335 C) $320 D) $540
Over time, quotas usually lead to larger deadweight losses than tariffs
Indicate whether the statement is true or false