When the United States imposed a tariff on imported shrimp, a Vietnamese official said: "If the tariffs are imposed, that will mean fewer shrimp for the U.S. market and higher prices for consumers. So the U.S. government position hurts its own people. That's irrational." The imposition of tariffs by the United States in this case illustrates:
A. the good/bad paradox that what is good economics is always bad politics and vice versa.
B. that U.S. consumers are either irrational or altruistic because they are willing to pay higher prices to help the U.S. shrimp industry.
C. what the text calls the general rule of political economy, which states that often small interest groups lobby better than large groups.
D. that the U.S. government, like all governments, is sometimes irrational.
Answer: C
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A) $0 B) $1 C) $6 D) $30
The minimum value of the Herfindahl-Hirschman Index (HHI) is ________ and the maximum value is ________.
A) 0; 10,000 B) 100; 1,000 C) 100; 10,000 D) 1; 1,000
Compared to the short-run price elasticity of demand, the long-run price elasticity of demand is
A) smaller. B) the same. C) greater. D) either greater than or less, depending on the number of substitutes the good has.
One of the objectives of supply-side policies is to
a. focus attention on the trade-off between inflation and unemployment. b. sharpen the trade-off between inflation and unemployment. c. eliminate the trade-off between inflation and unemployment. d. convince the public of the trade-off between inflation and unemployment.