Suppose the Swiss Government Subsidized Its Watch-Making Industry,enabling Swiss Producers

question 60

Multiple Choice

Suppose the Swiss government subsidized its watch-making industry,enabling Swiss producers to undersell foreign watch producers.The law of comparative advantage indicates that watch-importing nations would best take advantage of the Swiss subsidization policy by

• A)setting a tariff high enough to just offset the subsidy granted to the Swiss watch-making industry.
• B)setting a declining quota on the import of Swiss watches such that the nation's domestic watch-making industry would continue to grow at the same rate as the rest of the economy.
• C)setting a tariff such that the prices of Swiss and domestic watches to the consumer are equal.
• D)gladly accepting the subsidy of the Swiss government,making the appropriate adjustment for the resources temporarily displaced from the domestic watch-making industry.

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Definitions:

Onions

Bulbous plants belonging to the genus Allium, known for their strong smell and pungent flavor, used both as a vegetable and a seasoning.

Male Cone's

Cone-bearing structures on male plants, especially conifers, which produce pollen as part of the reproductive process.

Leaflike Scales

Flattened structures resembling leaves that provide protection or support, often seen in plants or insects.

Sporophylls

Leaves or leaf-like organs of ferns and other similar plants that bear or contain spores.