Which of the following is an example of roundabout production?
a. A farmer switches from growing soybeans to growing wheat, getting fewer crops per year as a result.
b. A farmer switches from growing soybeans to growing wheat, getting more crops per year as a result.
c. A self-employed dressmaker becomes a wage worker at a factory that makes dresses.
d. A coal mine is sold by its owners to its workers and run as a cooperative.
e. A telemarketing firm declares a holiday for two days while a new phone system is installed.
QUESTION 2Which of the following is not a criticism of the national defense argument for trade restrictions?
a. National defense only makes sense in the absence of international trade.
b. Stockpiling basic military hardware could eliminate the need to protect the domestic industry.
c. Nearly all industries can make some claim to strategic importance, so such trade restrictions can get out of hand.
d. National defense considerations can outweigh concerns about efficiency.
e. Government subsidies to domestic producers may be more efficient than trade restrictions.
QUESTION 3Roundabout production occurs when
a. entrepreneurs hire others to work for them, rather than taking the time to produce things themselves
b. workers avoid intermediary entrepreneurs and cooperate to produce output themselves
c. inefficient technology is used
d. producers make capital goods instead of consumption goods
e. a company takes time to market shares in the company
QUESTION 4Which of the following is not an argument in favor of restricting trade?
a. to preserve national security
b. to prevent dumping
c. to increase consumer surplus
d. to protect infant industries
e. to protect declining industries
QUESTION 5Saving is necessary for production because
a. more roundabout production is better
b. less roundabout production is better
c. production takes time
d. production is expensive
e. production requires labor
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