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Situation 32-1 in the Early 1980s, the U

Question 88

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Situation 32-1 In the early 1980s, the U.S. automobile industry managed to influence the government to negotiate a voluntary export restraint agreement with Japan that was in effect from 1981 until 1985. The predictable result was an average increase in the price of Japanese cars by about $1,000 and of U.S. cars by about $370. Also, as a result of the import quotas, 26,000 new jobs were "created" in the U.S. automobile industry.
Refer to Situation 32-l. At the time the total yearly salary (including all the benefits) of the average auto worker was no more than $50,000 per year, and the cost per job saved was estimated at $160,000 per worker per year. Based on this information we can conclude that


A) import quotas are a cost-efficient way of saving jobs.
B) the U.S. auto industry, through its lobbying efforts, managed to promote the general public interest.
C) the net social benefits of import quotas were positive.
D) import quotas are not a cost-efficient way of saving jobs.

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