One reason for the success that firms have in getting the government to erect barriers to foreign competition is that jobs lost to foreign competition are easy to identify but jobs created by foreign trade are often hard to identify
Which of the following is a second reason?
A) Firms that benefit from trade barriers have more money to lobby government officials to support the barriers than do firms that are harmed by trade barriers.
B) The costs that tariffs and quotas impose on consumers are large in total but relatively small per person.
C) The benefits from free trade are less than the costs.
D) People who benefit from foreign trade tend not to vote in elections; people who are harmed by foreign trade are much more likely to vote.
B
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The price ceiling causes a
A. shortage of 45 units. B. surplus of 85 units. C. shortage of 85 units. D. surplus of 40 units.
Which of the following is not true regarding the argument for protection as a way of maintaining jobs and wage levels?
a. Wages may be only a small fraction of total production costs. b. High wages do not necessarily imply high labor costs when productivity is taken into account. c. U.S. workers are among the most productive in the world partly because they are well educated and trained compared to other countries. d. U.S. workers are highly productive partly because they are provided with abundant supplies of machines and physical capital. e. It is not possible that the U.S. wages, even when supported by high U.S. output per worker, can render U.S. products competitive with low-wage countries.