Situation 32-1 In the early 1980s, the U.S. automobile industry managed to influence the government to negotiate a voluntary export restraint agreement with Japan that was in effect from 1981 until 1985. The predictable result was an average increase in the price of Japanese cars by about $1,000 and of U.S. cars by about $370. Also, as a result of the import quotas, 26,000 new jobs were "created"
in the U.S. automobile industry. Refer to Situation 32-1. Which of the following arguments is least likely to have been used by the U.S. auto industry to argue for import quotas?
A) If the quantity of low-priced import cars is not restricted, foreigners will overtake the U.S. car market.
B) A healthy auto industry is vital to our national security.
C) If import quotas are in place, our profits will increase by about $300 per vehicle.
D) Japan is protecting its market, and so should we; all we want is a level playing field.
C
You might also like to view...
As a firm hires more labor in the short run, the
A) extra output of another worker may rise at first, but eventually must fall. B) costs of production are increasing at a fixed rate per unit of output. C) level of total product stays constant. D) output per worker rises.
which of the following best summarizes the importance of business failure and the central idea of "creative destruction in a market economy?"
What will be an ideal response?
When a perfectly competitive firm experiences zero economic profits
A) the high barriers to entry prevent further competition. B) existing firms exit the industry. C) additional firms enter the industry. D) firms have no incentive to exit or enter the industry.
What are the two important programs in practice in America that strongly resemble a negative income tax?
What will be an ideal response?