The infant-industry argument is used by those who assert they want to
A) limit imports to protect new industries.
B) increase exports to encourage growth of new industries.
C) limit exports.
D) increase imports to earn money to support new industries.
E) encourage foreign firms to dump in the United States.
A
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With a price floor:
A. producer surplus will fall if profits fall. B. producer surplus will fall if profits rise. C. producer surplus will increases if profits fall. D. producer surplus always increases.
When we compare PAE and actual output (Y) if PAE is greater than Y we expect that:
A. inventories to increase. B. inventories to decrease. C. there will be no change in inventories. D. the government will spend more than it has collected in taxes.
Most economists believe that the infant industry argument for protection, though theoretically justified, often keeps firms from becoming more competitive.
Answer the following statement true (T) or false (F)
If a purely competitive firm shuts down in the short run:
A. its loss will be zero. B. it will realize a loss equal to its total variable costs. C. it will realize a loss equal to its total fixed costs. D. it will realize a loss equal to its explicit costs.