"Trade restrictions will stop foreign imports, which will increase American employment and protect American jobs." Most economists realize this argument is wrong. Can you explain why?
Trade restrictions will stop foreign imports, but this means that foreigners will no longer have the dollars that those imports used to generate. With fewer dollars, foreigners will buy fewer American goods (since this is virtually the only thing that dollars are good for). Employment in American export industries will suffer. Trade restrictions only protect jobs in industries that compete with imports; they destroy jobs in export industries.
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In a competitive market when there is no deadweight loss
A) consumer surplus is minimized. B) producer surplus is minimized. C) consumer surplus plus producer surplus is maximized. D) consumer surplus plus producer surplus is minimized.
A resilient market is one in which
A) wide price swings occur when orders decline. B) volume picks up quickly when prices change. C) bid-asked spreads are large. D) volume is large.
Some modern theories of consumer behavior have:
A) emphasized that consumption is basically an instantaneous act. B) contended that in the MUx/Px = MUy/Py equation MU is understated for time-intensive goods. C) introduced the opportunity cost of time as a component of product price. D) argued that inflationary expectations negate the theory of consumer behavior.
What does new technology generally do to production?
(A) It lowers cost and decreases supply. (B) It lowers cost and increases supply. (C) It has very little effect on production. (D) It increases cost and decreases supply.