The Problem with the Protection-As-A-Bargaining-Chip Argument for Trade Restrictions Is

question 145

Multiple Choice

The problem with the protection-as-a-bargaining-chip argument for trade restrictions is

• A)if it works, consumer surplus will decline.
• B)if it works, producer surplus falls.
• C)if it fails, the country faces a choice between two bad options.
• D)if it fails, total surplus will increase.

---

Definitions:

Controllable Variance

The difference between the expected cost and the actual cost that management has the power to influence or control.

Fixed Factory Overhead

Regular, consistent expenses incurred in the operation of a factory that do not vary with production level, such as rent, salaries, and insurance.

Volume Variance

The difference between the expected volume of production and the actual volume, which impacts the allocation of fixed costs in some costing systems.

Direct Labor Rate Variance

The difference between the actual costs of labor and the expected (or standard) costs, based on the hourly wage rates times the number of hours worked.