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:

Perfectly Competitive

A market structure characterized by a complete absence of rivalry among the individual firms.

Price Takers

Firms or individuals who accept the market price as given and have no influence to change it due to their small market share.

Market Price

The prevailing rate at which a service or asset is traded in the free market.

Standardized Product

Goods or services that are uniform in quality and performance, allowing them to be interchangeable among consumers.