An increase in demand for resources fixed or specific to an industry will cause their earnings _____ because those resources cannot be released from other industries.
a. to fall
b. to rise by the same rate as for all resources
c. to rise disproportionally
d. to fall disproportionally
Ans: c. to rise disproportionally
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Consider a good for which the number of people who benefit from the good is large and the exclusion of any one those people is impossible. In this case, the market for this good will likely
a. be provided by a private firm rather than the government. b. have a free-rider problem. c. not exist. d. be limited to a small number of units of production.
Which of the following groups were losers after the European Union's imposition of an antidumping duty on shoes imported from China?
a. European consumers and European shoe manufacturers b. Chinese consumers and Chinese shoe manufacturers c. Chinese consumers and European shoe manufacturers d. European consumers and Chinese shoe manufacturers
A concern about crowding out caused by increased government borrowing is that:
A. interest rates on private borrowing fall. B. lower rates of economic growth can result from a decline in business investment spending. C. the federal government may default on its loans. D. foreign lenders find it less attractive to help finance federal deficits.
Which of the following arguments for trade protection contends that new domestic industries need support to establish themselves and survive?
A. The increased domestic employment argument. B. The cheap foreign labor argument. C. The diversification-for-stability argument. D. The infant industry argument.