What Is One of the Major Shortcomings of Using Tariffs

question 105

Multiple Choice

What is one of the major shortcomings of using tariffs or quotas to "save American jobs"?

• A)Trade barriers protect the development of new technology, but the new technology eliminates jobs.
• B)Import restrictions alter the composition of domestic employment, but they have minimal effect on the overall level of domestic employment.
• C)The volume of trade with other nations is limited to a few industries, so trade restrictions would not increase national employment.
• D)Major American firms have produced many products in other countries and would not hire more domestic labor when trade barriers are imposed.

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Definitions:

Cost Function

A mathematical relationship that describes how the total cost of production changes with varying levels of output.

Cartel Arrangement

An agreement between competing firms or countries to control prices, limit supply, or restrain competition in a particular market.

Manufacturing Plant

A facility used for the industrial production of goods, including assembly lines and machinery for manufacturing products.

Stackelberg Leader

A firm in a duopoly that moves first to set its output level, thereby determining the market's price and influencing the subsequent behavior of a follower firm.