Describe the pressures that discourage trade.
What will be an ideal response?
One pressure occurs because trade hurts workers and producers who compete with imported products and provides them with an economic interest in restricting trade. The national security argument against trade is that we can't depend on foreign suppliers to provide us with defense-related goods or food in time of war, so we should protect these industries by discouraging trade. The dumping argument against free trade is that domestic production may be undercut when foreign producers sell their products at prices lower than domestic prices, in order to drive the domestic producers out of business (consolidating monopoly power that may eventually harm buyers). The infant industries argument against free trade is that imports may make it difficult or impossible for a new domestic industry to develop.
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Why are Federal Reserve Notes (U.S. dollar bills) money in the U.S? Because
A) they are backed by gold. B) they are used as a general medium of exchange. C) they are created by the government. D) they would otherwise be useless. E) of all the above reasons.
For a competitive firm, the value of output ___________ and the marginal product of labor ___________ with each additional worker hired.
A. stays constant; decreases B. increases; decreases C. increases; increases D. decreases; stays constant
If there is a great deal of violence and uncertainty in the country of Crazico, people will be less willing to invest in their own future or in the future of Crazico
a. True b. False
Ten friends who love to ski decide to pool their financial resources and equally share the cost of a one-week time-share condominium in Alta, Utah. Suppose that the lift lines at the ski resort become more congested when the ten additional people start to ski. Which of the following statements is not correct?
a. Use of the ski resort by the ten new skiers will yield a negative externality. b. The ski resort can reduce the congestion externality by raising lift ticket prices. c. An increase in lift ticket prices could be viewed as a corrective tax on the externality of congestion. d. Each of the ten friends would have been better off staying at home.