Question 26 Economists overwhelmingly support more open markets because trade Se

Question

Question 26

Economists overwhelmingly support more open markets because trade

Select one:

a. creates jobs.

b. directly benefits everyone in the country.

c. increases the profit margins of firms.

d. leads to a better allocation of resources inside countries.

e. All of the choices.

Question 27

Which of the following is NOT a true statement?

Select one:

a. There are diminishing returns to trade negotiations.

b. Economists generally favor further reductions in trade barriers.

c. Trade barriers are usually a good way of protecting jobs.

d. There have been significant reductions in trade barriers over the last 60 years.

Question 29

Which of the following is FALSE?

Select one:

a. Government revenue increases after a tariff is imposed.

b. Producer surplus increases after a tariff is imposed.

c. Consumer surplus increases after a tariff is placed on imports.

d. Deadweight losses result from tariffs.

Explanation / Answer

26. Option D. leads to a better allocation of resources inside countries.

Explanation: Trade allows countries to produce according to their own comparative advantage. This results in better use of resources and helps in achieving higher economic efficiency.

27. Option C. Trade barriers are usually a good way of protecting jobs.

Explanation: Trade barriers results in loss of economic efficiency. Also, it results in a deadweight loss and a fall in consumer surplus. Therefore, it is not a good way of protecting jobs.

29. Option C. Consumer surplus increases after a tariff is placed on imports.

Explanation: A tariff results in a higher price of products. So, it reduces consumption and results in a loss of consumer surplus.

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