The Following Questions Refer to the Table Below

question 116

Multiple Choice

The Following Questions Refer to the table below. The cost of each police officer is $20,000; the cost of each patrol car is $10,000.
-The net social benefit of the third patrol car is

• A)$11,000
• B)$15,000
• C)$20,000
• D)$36,000
• E)$45,000

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Definitions:

Smoot-Hawley Tariff

The U.S. tariff law of the 1930s, which set the highest tariffs in U.S. history (60 percent). It set off an international trade war and caused the decline in trade that is often considered one of the causes of the worldwide depression of the 1930s.

Export Subsidy

A governmental financial support for companies exporting products, designed to encourage exports by making them price competitive in global markets.

Dumping

A firm’s or an industry’s sale of products on the world market at prices below its own cost of production.

Natural Comparative Advantage

A situation where a country or region can produce a particular good or service at a lower opportunity cost compared to other countries or regions.