Countries that restrict foreign trade are likely to

Question

BlackTom AI · Accepted Answer

Question restatement: The prompt asks what is likely to happen when countries restrict foreign trade.
Option 1: 'forgo the additional surplus that trade allows, but will probably enjoy economies of scale.' This is misleading because trade restrictions typically reduce the gains from trade and the potential for large-scale specialization, which can hinder economies of scale rather than guarantee them. While some domestic firms might achieve scale, the overall effect is usually a loss of total welfare due to restricted competition and smaller export opportunities.
Option 2: 'forgo the additional surplus that trade allows, but will be compensated by a higher rate of technological change.' The logic here assumes that protectionism automatically spurs faster technological progress as a compensating benefit. In practice, protection often reduces incentives to innovate because domestic firms face less pressure from global competition, so this compensation is unlikely and not generally reliable.
Option 3: 'forgo the additional surplus that trade allows, but will have a lower rate of unemployment.' Although protectionist policies can influence employment, the net effect is ambiguous and often negative in terms of overall welfare. Trade restrictions can preserve some domestic jobs in protected industries but typically at the cost of higher prices and less dynamic efficiency, and they do not guarantee lower unemployment across the economy.
Option 4: 'have more firms with domestic market power.' This statement aligns with the standard economic intuition: when trade is restricted, competition from foreign firms diminishes, allowing remaining domestic firms to gain greater market power in the protected sectors. Barriers to entry and reduced import competition can enable domestic firms to charge higher prices and exert more influence over the market, increasing market power for those firms.
In sum, the first three options describe potential effects that are either unlikely to hold under typical trade-restriction scenarios or are context-dependent and not guaranteed, whereas the fourth option captures a common and plausible consequence: increased domestic market power for fewer firms due to reduced foreign competition and barriers to entry. Therefore, option 4 is the most accurate characterization of the likely outcome under restricted foreign trade.

2254 ECON 0103 SEC2020 ECON 103 Homework 6

Countries that restrict foreign trade are likely to

查看解析

登录即可查看完整答案

类似问题

A spice, found to cure many ailments, is only found in a small part of Asia. The region has begun exporting the spice around the world. This shows the

Which of the following is NOT true about the trade relationship between two countries, such as China and the U.S.?

Which of the following are reasons to trade with the rest of the world? Select all that apply.

International trade in goods and services has increased over the last 50 years because of ______. Select all that apply.

Question at position 50 Which one of the following is NOT one of the functions of the World Trade Organization?Monitoring trade policiesHelping to combat emergencies, such as the worldwide pandemicProviding aid for developing countriesHelping to resolve trade disputesClear my selection

Question at position 21 An import can only occur inside the borders of your home country and an export can only occur outside the borders of your home countryTrueFalse

更多留学生实用工具

考试浏览器助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单