Evaluate the statement: “Tariffs and quotas are needed to protect American products from dumping.”
What will be an ideal response?
Dumping is a form of price discrimination that might be practiced by foreign producers who sell their product at a high price in the domestic market and at a lower price in the export market. Also, a foreign company with large financial resources may sell a product below cost for an extended period to gain market share in another nation and to drive out domestic competitors in that nation. Dumping can be beneficial for consumers in that export market because they pay a lower price for the product.
The dumping charge has been used to justify tariffs or quotas, but there is little need for such permanent and across-the-board measures to address this problem. Dumping is prohibited by trade law in the United States. If it is found to be practiced by a foreign firm, then it requires investigation and damages can be assessed. Dumping, however, is relatively rare and it is difficult to determine whether a company is selling below cost or is just a more efficient producer.
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The most populous state in the U.S. is:
a. Illinois b. California c. Michigan d. Georgia
The marginal propensity to consume is the ratio of a change in consumption to a change in income
Indicate whether the statement is true or false
Suppose there are two groups of consumers that a monopolist can identify, one with relatively price-inelastic demand (perhaps because they have higher income and thus are not price sensitive) and one with relatively price-elastic demand. Which of the following forms of price discrimination would increase profit relative to charging each group the same price?
a. Charging the group with the higher price elasticity a higher price, and charging the group with the lower price elasticity a lower price. b. Charging the group with the higher price elasticity a lower price, and charging the group with the lower price elasticity a higher price. c. Charging the group with the higher price elasticity a price equal to marginal cost, and charging the group with the lower price elasticity a higher price. d. Charging a uniform price to both the groups of consumers.
If an increase in the government-imposed minimum wage pushes the price (wage) of unskilled labor above market equilibrium, which of the following will most likely occur in the unskilled labor market?
A. An increase in quantity of unskilled labor demanded. B. A decrease in the quantity of unskilled labor supplied. C. A shortage of unskilled labor. D. A surplus of unskilled labor (unemployment).