2. The arguments for restricting tradeSuppose there is a policy debate over whether the United States should impose trade restrictions on imported ball bearings:The president of the United States explains that it is necessary to impose trade restrictions, such as a tariff, on the ball-bearing industryto protect workers in the domestic ball-bearing industry. The president claims that without trade protection, there will be layoffs, causingmany U.S. workers in the ball-bearing industry to be unemployed.Which of the following justifications is the president using to argue for the trade restriction on ball bearings?Infant industry argumentO Cheap foreign labor argumentNational security argumentEmployment argument

The justification the president is using to argue for the trade restriction on ball bearings is the…

Answered: 2. The arguments for restricting trade…

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Firms In Competitive Markets

Section: Chapter Questions

Problem 11PA

See similar textbooks

Similar questions

Explain how a subsidy on agricultural goods like sugar adversely affects the income of foreign producers of imported sugar.
6. The arguments for restricting trade Suppose there is a policy debate regarding the United States' Imposing trade restrictions on Imported semiconductors. Read the following scenario and answer the question that follows. A senator from a state with several semiconductor factories argues that the United States should threaten to impose a tariff on Chinese semiconductors in order to induce the Chinese to remove its tariff on American cars. Which of the following justifications is the senator using to argue for the trade restriction on semiconductors? O Jobs argument O National-security argument O Unfair-competition argument O Using-protection-as-a-bargaining-chip argument O Infant-industry argument
The U.S. is one of the main producers of oil in the world. Still, at the current world price, there is a shortage of oil in the U.S. market and the country has to cover it through imports. Suppose the U.S. government decided to introduce an import tariff St on oil imports. i. Draw a diagram that shows the effect of this policy on the U.S. oil market and on the global oil market. Indicate the effect of oil import tariff on U.S. consumers, producers and government revenue. ii. How does this tariff affect U.S. welfare? Explain (you may use a diagram from part (a) if you want).
7. Consider a country that imports a good from abroad.For each of following statements, state whether it istrue or false. Explain your answer.a. “The greater the elasticity of demand, the greaterthe gains from trade.”b. “If demand is perfectly inelastic, there are no gainsfrom trade.”c. “If demand is perfectly inelastic, consumers donot benefit from trade.”
6. The world market for large passenger jet airplånes is all onBOP firms: Boeing in the United States and Airbus in Europe. a. Explain why the market equilibrium might involve either a low price for airplanes or a high price for airplanes. b. From the perspective of the well-being of the United States (or Europe), why might a high-price equilibrium be desirable? c. What price outcome is desirable for Japan or Brazil? Why? d. If the outcome is the high-price equilibrium, does Japan or Brazil still gain from importing airplanes? Explain. 7. A monopolistically competitive industry exists in both Pugelovia and the rest of the world, but there has been no trade in this type of product. Trade in this type of product is now opened. a. Explain how opening trade affects domestic consumers of this type of product in Pugelovia. b. Explain how opening trade affects domestic producers of this type of product in Pugelovia. 8. You are a consumer of a product that your country imports. There is an…
The following figure illustrates the demand and supply schedules for pocket calculators in Mexico, a "small" nation that is unable to affect the world price. 14 8 6 3 2 0 $ 10 40 60 80 SMexico Priceworld+Tarrit Refer to the above figure. In the O a. 40 calculators O b. 80 calculators O c. 10 calculators O d. 60 calculators 110 Price world Omexico Pocket Calculators of trade, Mexico produces and QUESTION 5 Which of the following is not an example of non-tariff measures: O a. Deployment of a new import-competing technology. O b. Cost-increasing measures. O c. Tax-like measures. O d. Government procurement policies.
2. According to the graph, answer the following questions about Pencil Sharpeners. Price of Pencil Sharpeners $24 16 12 4 Domestic Supply World Price Domestic Demand 0 200 300 450 Quantity of Pencil Sharpeners a. What is the equilibrium price of Pencil Sharpeners before trade? b. What is the equilibrium quantity of Pencil Sharpeners before trade? c. What is the price of Pencil Sharpeners after trade is allowed? d. What is the quantity of Pencil Sharpeners exported? e. What is the amount of consumer surplus before trade? f. What is the amount of consumer surplus after trade? g. What is the amount of producer surplus before trade? h. What is the amount of producer surplus after trade? i. What is the amount of total surplus before trade? j. What is the amount of total surplus after trade? k. What is the change in total surplus because of trade?
In 1932, U.S. manufacturers, which used to enjoy steady relationships with their foreign distributors and export nearly 60% of their output, realized that their exports had fallen to only 20% of total output. Which of the following is the most likely reason for this decrease in exports? O The low quality of U.S. products O war between the United States and Canada O Retaliatory tariffs by trading partners The signing of the General Agreement on Tariffs and Trade (GATT) in 1947 resulted in the adoption of several new trade policies. In the following table, indicate if each of the policies listed was a result of GATT. Then, complete the last column by identifying the means by which each GATT policy was implemented. Policy GATT Policy Implementation Promotion of protectionism Clear and public trade rules Promotion of lower trade barriers Yes v Institution of the WTO Promotion of trade transparency Settling trade disputes In the 1960s, multilateral negotiations called the Uruguay Round…
4. Under what conditions could an import quota and a tariff have exactly the same effect on price and bring the same gains and losses (given a tariff level that restricts imports just as much as the quota would)?
6. The arguments for restricting trade Suppose there is a policy debate regarding the United States' imposing trade restrictions on imported semiconductors.. Read the following scenario and answer the question that follows. A political pundit argues that the government should impose a tariff on semiconductors because they are a necessary input into the production of various weapons. Free trade, she contends, would make the United States overly dependent on foreign countries for the supply of semiconductors and thus, in case of war, unable to make enough weapons to defend itself. Which of the following justifications is the pundit using to argue for the trade restriction on semiconductors? O Using-protection-as-a-bargaining-chip argument O Jobs argument O National-security argument Unfair-competition argument Infant-industry argument
2. Assume that Sweden and Norway currently producing and consuming soybeans and coffee. The following table 1 shows the prices of soybeans and coffee for both nations. Table 1: Prices of soybean and coffee Price (per carton) Soybeans (S) Coffee ($) Sweden Norway 64 85 71 82 Based on relative price of coffee, can Norway gain by exporting soybeans? If no, what commodity Norway should export? Briefly explain this scenario by using an appropriate diagram.
8. Assume that now trade happens. The relative supply of wine in the home country is less than the world (because the home country is better at making laptops). What would happen to the relative price of wine to laptop in the home country when trade is allowed? Which group would benefit from this? a) Pwine/Ptaptop would increase and laptop manufacturers would gain b) Pwine/Plaptop would increase and wine makers would gain c) Pwine/Ptaptop would decrease and laptop manufacturers would gain d) Pwine/Piaptop would decrease and wine makers would gain

SEE MORE QUESTIONS

Recommended textbooks for you

Principles of Economics, 7th Edition (MindTap Cou…

Economics

ISBN:

9781285165875

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Essentials of Economics (MindTap Course List)

Economics

ISBN:

9781337091992

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Economics, 7th Edition (MindTap Cou…

Economics

ISBN:

9781285165875

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Essentials of Economics (MindTap Course List)

Economics

ISBN:

9781337091992

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Macroeconomics (MindTap Course List)

Economics

ISBN:

9781285165912

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Microeconomics (MindTap Course List)

Economics

ISBN:

9781305971493

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Macroeconomics (MindTap Course List)

Economics

ISBN:

9781305971509

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS