An effective import quota
a. lowers the price of imports
b. lowers the price of domestic goods competing with imports
c. increases the variety of goods available to the consumer
d. increases tax revenues
e. lowers the quantity demanded of the imported good
QUESTION 2Union membership over the last five decades has
a. grown at the same rate as the labor force
b. become much more attractive and has grown more rapidly than the labor force
c. become much more attractive
d. grown more rapidly than the labor force
e. declined
QUESTION 3An import quota is a
a. tax on imports
b. legal limit on the amount of a specific good that can be imported into a particular country
c. tax on import quantities above the legal limit
d. way to increase tariff revenues
e. legal incentive for members of GATT to increase their exports of a particular good
QUESTION 4Union membership has continued to grow faster than the labor force in the United States since World War II.
a. True
b. False
QUESTION 5Which of the following is true concerning the impact of tariffs and quotas?
a. Tariffs raise the price of a good but quotas do not.
b. Tariffs reduce consumer and producer surplus whereas quotas reduce domestic consumer surplus and increase domestic producer surplus.
c. Both tariffs and quotas increase the quantity demanded.
d. The revenue resulting from a tariff goes to the government whereas the revenue resulting from a quota goes to whoever is awarded the right to sell the product.
e. The potential welfare loss is greater with tariffs than quotas.
QUESTION 6If a union is able to restrict the supply of a non-union-made substitute product,
a. wages will increase but employment will decrease
b. wages will increase and employment will increase
c. wages will decrease but employment will increase
d. wages will decrease and employment will decrease
e. the demand for non-union labor will increase
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