Trade Restrictions Have Been Defended on the Grounds That They

question 66

Multiple Choice

Trade restrictions have been defended on the grounds that they

• A)raise prices domestically and thus benefit consumers
• B)increase imports
• C)lower prices domestically and thus benefit consumers
• D)decrease product quality in domestic markets
• E)protect domestic infant industries

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Definitions:

Economic Profits

The difference between a firm's total revenue and its total costs, including both explicit and implicit costs, indicating the extra income earned over what could have been earned in the next best alternative.

Accounting Profits

The sales revenues minus the expenses of a firm over a designated time period, usually one year. Accounting profits typically make allowances for changes in the firm’s inventories and depreciation of its assets. No allowance is made, however, for the opportunity cost of the equity capital of the firm’s owners, or other implicit costs.

Zero

Zero is a numerical value representing the absence of any quantity or magnitude; it plays a central role in mathematics and economics.

Corporate Form

A legal structure for a business, recognized by law as separate from its owners, with its own rights, privileges, and liabilities.