Discuss national defense, infant industry, and strategic trade as arguments for protection
National defense arguments can be made for certain products, such as oil, but the danger is that these arguments will be extended toward nondefense-related industries such as watches. The infant industry argument that young industries should be protected is rarely valid, since many industries must start in the red before being successful. The strategic planning argument asserts that we may need to protect our industries by retaliating for other countries' transgressions. But if retaliation escalates, all parties lose.
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Suppose Jack Weldon came up with a novel idea of making lamps out of recycled automobile tires. His firm, No-Skid Lamps, works three shifts a day trying to keep up with demand. Attracted by its success, other firms copy the idea and produce similar lamps. As a result, No-Skid Lamps' demand curve
a. shifts to the right and becomes more inelastic b. shifts to the right and becomes more elastic c. shifts to the left and becomes more inelastic d. shifts to the left and becomes more elastic e. stays the same
A raise in the demand for a resource to produce some product (x) will
a. Raise the cost of using the resource for an alt. product b. Reduce the use of that resource in alt lower valued production c. Increase the value of the resource d. All
The table below shows the number of labor hours required to produce one umbrella and one bushel of corn in the United Kingdom and the rest of the world. What is the opportunity cost of producing a bushel of corn in the United Kingdom? Labor hours to make:In the United KingdomIn the Rest of the World1 umbrella3.002.001 bushel of corn1.000.25
A. Eight umbrellas B. 1/8 of an umbrella C. Three umbrellas D. 1/3 of an umbrella
The learning curve suggests that an individual will
A) receive the same income throughout a career. B) gain experience and increase productivity over time. C) be subject to frequent spells of unemployment. D) have an income that falls over time.