Direct Democracy Makes Tariffs Less Likely to Be Voted into Law

question 16

Multiple Choice

Direct democracy makes tariffs less likely to be voted into law because:

• A)the size of the individual losses would be larger than the individual gains from any potential protectionist measure.
• B)domestic producers threatened by increased imports will lobby against the trade agreements entered into by the countries.
• C)each person does not vote on the basis of his/her direct interest as a winner or loser from protection.
• D)the number of people who are hurt by protectionist measures exceeds the number of people who gain from protectionist measures.

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Definitions:

Break-Even Point

The point at which total costs and total sales are equal, resulting in no net loss or gain for the business.

Contribution Margin

The gap between income from sales and variable expenses, which is utilized to pay for fixed expenses and produce earnings.

Selling Price

Selling price is the amount a buyer pays to purchase a product or service from a seller.

Variable Cost

Costs that change in proportion to the level of goods or services produced, such as materials and labor costs.