Arguments in Support of Protectionism (And Against Free Trade) Include

question 265

Multiple Choice

Arguments in support of protectionism (and against free trade) include all of the following EXCEPT

• A) new and troubled industries need to be protected until they acquire sufficient strength to compete equally against their foreign counterparts.
• B) jobs at home should be protected from cheap foreign labor.
• C) protectionism increase total domestic consumption possibilities.
• D) national security interests require that nations retain the ability to produce vital materials at home and avoid dependence upon potential enemies.

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Definitions:

Monopolistically Competitive Firm

A company that operates in a market structure characterized by many sellers offering differentiated products, allowing for some control over pricing.

Socially Optimal Level

The most efficient allocation of resources or production level that maximizes social welfare, often considered in terms of economic or environmental outcomes.

Many Sellers

A characteristic of competitive markets where a large number of producers offer similar or identical products, ensuring no single seller can influence the market price or conditions.

Few Sellers

A market condition where only a small number of companies offer a product or service, potentially leading to oligopolistic competition.