Q6. An anti-dumping restriction on trade:

A)     prohibits foreign firms from selling products below cost to gain market share.

B)     keeps some highly sensitive products in the country.

C)     protects infant industries.

Q7. Which of the items below is NOT a valid reason why nations adopt trade restrictions? To:

A)     prohibit foreign firms from increasing market share by selling products below cost.

B)     protect industries in which they have a comparative advantage.

C)     protect industries that are highly sensitive to national security.

Q8. Which of the following arguments for trade restrictions is least valid?

A)   Trade restrictions create domestic jobs.

B)   Some industries are highly sensitive to national security, and their products should therefore remain in the country.

C)   Tariffs are used to prohibit foreign firms from selling products in the country at below cost in an attempt to gain market share.

Q9. David Forsythe and Linda Novak are discussing the advantages and disadvantages of import restrictions. They state the following:

Forsythe: One of the groups that benefits from import restrictions is often the government that imposes them.

Novak: Import restrictions impose costs on specific groups, such as the country’s import industries, but these costs are more than offset by the benefits to other groups and to the economy as a whole.

With respect to these statements:

A)   both are correct.

B)   only one is correct.

C)   both are incorrect.

Q10. Which of the following reasons for a nation to adopt trade restrictions is the least valid? The:

A)     national defense argument.

B)     job protection argument.

C)     anti-dumping argument.

答案和详解如下：

Q6. An anti-dumping restriction on trade:

A)     prohibits foreign firms from selling products below cost to gain market share.

B)     keeps some highly sensitive products in the country.

C)     protects infant industries.

Correct answer is A)

Firms dump their goods at a price lower than cost in order to drive out the competition. Once this is complete, they will be able to raise prices to much higher levels in order to gain abnormal profits. Of course, once prices are increased, new competitors may arise.

Q7. Which of the items below is NOT a valid reason why nations adopt trade restrictions? To:

A)     prohibit foreign firms from increasing market share by selling products below cost.

B)     protect industries in which they have a comparative advantage.

C)     protect industries that are highly sensitive to national security.

Correct answer is B)

If a particular country enjoys a comparative advantage in a particular industry, no protection is needed.

Q8. Which of the following arguments for trade restrictions is least valid?

A)   Trade restrictions create domestic jobs.

B)   Some industries are highly sensitive to national security, and their products should therefore remain in the country.

C)   Tariffs are used to prohibit foreign firms from selling products in the country at below cost in an attempt to gain market share.

Correct answer is A)

While the other explanations have some support among economists, the argument that trade restrictions create domestic jobs has very little support. Part of the popularity of trade restrictions stems from their ability to protect easily identifiable jobs and the high wage levels in these jobs. However, in the long run, trade restrictions cannot protect the net number of jobs in the country.

Q9. David Forsythe and Linda Novak are discussing the advantages and disadvantages of import restrictions. They state the following:

Forsythe: One of the groups that benefits from import restrictions is often the government that imposes them.

Novak: Import restrictions impose costs on specific groups, such as the country’s import industries, but these costs are more than offset by the benefits to other groups and to the economy as a whole.

With respect to these statements:

A)   both are correct.

B)   only one is correct.

C)   both are incorrect.

Correct answer is B)         

Forsythe is correct. A primary reason why trade restrictions remain widespread is the revenue that governments receive from tariffs. Novak is incorrect. Trade restrictions benefit specific groups, such as workers in the protected industries, but those benefits are less than the costs imposed on consumers and other industries as a whole.

Q10. Which of the following reasons for a nation to adopt trade restrictions is the least valid? The:

A)     national defense argument.

B)     job protection argument.

C)     anti-dumping argument.

Correct answer is B)         

The number of jobs protected by import restrictions will be offset by jobs lost in the import/export industries. In the long run, trade restrictions cannot protect the net number of jobs in a country.

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