Which of the following are potentially valid arguments for tariffs or export subsidies, and which are not? a. "The more oil the United States imports, the higher the price of oil will go in the next world shortage." O A. Potentially valid. In addition to a terms of trade benefit, it would encourage the accumulation of O B. Not valid. Since oil is valued in dollars on world markets, there would be no terms of trade inventories to minimize the potential for future adverse shocks. benefit of a tariff. b. "The growing exports of off-season fruit from Chile, which now accounts for 80 percent of the U.S. supply of such produce as winter grapes, are contributing to sharply falling prices of these former luxury goods." O A. Potentially valid. Protecting agriculture is valid as an argument for national security. O B. Not valid. Since these are off-season fruits, domestic producers are not harmed by the imports. c. "U.S. farm exports don't just mean higher incomes for farmers-they mean higher income for everyone who sells goods and services to the U.S. farm sector." O A. Potentially valid. Export subsidies encourage domestic production at a minimal cost to society. O B. Not valid. Unless there is some domestic market failure, an export subsidy always produces more costs than benefits. d. "Semiconductors are the crude oil of technology; if we don't produce our own chips, the flow of information that is crucial to every industry that uses microelectronics will be impaired." O A. Potentially valid. If one assumes there are external economies in this industry, the benefit of a O B. Not valid. Semiconductors are used in so many electronic products that a tariff would devastate tariff may outweigh the costs any industry that uses semiconductors. e. "The real price of timber has fallen 40 percent, and thousands of timber workers have been forced to look for other jobs." O A. Potentially valid. The economic costs of the workers who lose their jobs far outweigh the O B. Not valid. Cheaper lumber has benefited consumers and builders. It would be more efficient for benefits of cheaper lumber. the winners from trade to compensate the losers