Howard Believes That There Should Be No Trade Restrictions for Any

question 127

Multiple Choice

Howard believes that there should be no trade restrictions for any reason. What effect would Howard say that trade restrictions have on prices?

• A) He would argue that by encouraging competition with trade restrictions, prices are likely to decrease.
• B) He would argue that restrictions would cause greater competition and therefore lead to higher prices.
• C) He would say that trade restrictions have no impact on prices, but they do restrict consumers' choices.
• D) He would say that restrictions reduce competition and therefore cause an increase in prices.
• E) He would argue that trade restrictions increase prices because they break up domestic monopolies.

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Definitions:

Identical Service

A service that is exactly the same in every feature and aspect when compared to another service.

Efficient Output

The level of production at which a company or economy can produce goods at the lowest possible cost per unit, maximizing the allocation of resources.

Perfect Competitor

A hypothetical firm in a perfectly competitive market that cannot influence the market price of its product and takes the market price as given.

Marginal Cost

A concept in economics that refers to the change in the total cost when an additional unit of a product is produced.