Why don't the winners from free trade win the political argument?
What will be an ideal response?
Trade restrictions are enacted despite the inherent inefficiency because of the political actions of rent seeking groups, which fear that foreign competition might have a negative impact on their industry, firm, or jobs. The anti-trade groups are easily organized and have much to gain from trade restrictions, whereas the vast millions of consumers, who would win from free trade, are difficult to organize because each individual has only a small amount of loss when trade restrictions are imposed. Hence the winners from trade restrictions frequently out-lobby the winners from free trade.
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Many wines are priced high in order to
a. Indicate low quality b. Indicate high quality c. Indicate a bargain brand d. None of the above
If the marginal revenue product of land is greater than its price, a firm should
A. decrease the price it is willing to pay for land. B. use more land. C. use less land. D. try to decrease the productivity of land.