The main problem with using the infant industries argument to justify protecting an industry from foreign competition is that
a. all industries will claim that they are infant industries in order to gain protection
b. the protected industry will become too efficient and drive out foreign competition
c. once in place, it is difficult to remove protection even as the industry matures
d. it causes the goods that are produced in the protected industry to have lower prices
e. this policy compromises national security if the infant industry produces military goods
C
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In the (consumption,leisure) space, indifference curves as we have assumed them have the property of presenting the highest levels of satisfaction
A) in the north-east corner. B) in the south-east corner. C) in the north-west corner. D) in the south-west corner.
Currency speculators are traders who seek to profit from a(n):
a. shift in global demand and supply patterns. b. increase in the price of oil. c. sudden shift in interest rates. d. exchange rate change by selling the currency expected to appreciate and buying the currency expected to depreciate. e. exchange rate change by selling the currency expected to depreciate and buying the currency expected to appreciate.
Suppose that Firms A and B each produce high-resolution computer monitors, but Firm A can do so at a lower cost. Cassie and David each want to purchase a high-resolution computer monitor, but David is willing to pay more than Cassie. If Firm A produces a monitor that Cassie buys but David does not, then the market outcome illustrates which of the following principles? (i) Free markets allocate
the supply of goods to the buyers who value them most highly, as measured by their willingness to pay. (ii) Free markets allocate the demand for goods to the sellers who can produce them at the least cost. a. (i) only b. (ii) only c. both (i) and (ii) d. neither (i) nor (ii)
Which of the following statements is not correct?
a. Private markets tend to over-produce products with negative externalities. b. Private markets tend to under-produce products with positive externalities. c. Private parties can bargain to efficient outcomes even in the presence of externalities. d. Private parties are usually more successful in achieving efficient outcomes than government policies in the presence of externalities.