Many people argue that the imposition of tariffs in industry X will increase factor incomes in that industry and therefore be good for the country as a whole. The counter-argument is that... a. Factor incomes would first rise and then decrease in industry X. b. The increase in industry X factor incomes would be more than offset by reductions in real incomes to all other domestic residents. c. The increase in factor incomes in industry X would reduce profits to business owners by an equal amount. d. Factor incomes overall would increase, but wages in industry X would fall, which would hurt workers in that industry. e. The increase in factor incomes would increase unemployment.

Many people argue that the imposition of tariffs in industry X will increase factor incomes in that industry and therefore be good for the country as a whole. The counter-argument is that... a. Factor incomes would first rise and then decrease in industry X. b. The increase in industry X factor incomes would be more than offset by reductions in real incomes to all other domestic residents. c. The increase in factor incomes in industry X would reduce profits to business owners by an equal amount. d. Factor incomes overall would increase, but wages in industry X would fall, which would hurt workers in that industry. e. The increase in factor incomes would increase unemployment.

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter17: International Trade

Section: Chapter Questions

Problem 2.6P

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