The infant industry argument is valid when
A. a new industry is suffering financial losses.
B. a new industry is less efficient than foreign competitors.
C. the industry’s prospective gains are sufficient to repay the social losses incurred while it is being protected.
D. the industry is not likely to be profitable in the future.
Answer: C
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Jai Li just lost her job, and she has not yet started looking for a new one. The Bureau of Labor Statistics counts Jai Li as
a. unemployed and in the labor force. b. unemployed but not in the labor force. c. in the labor force but not unemployed. d. neither in the labor force nor unemployed.
Study the graph. Suppose this nation starts with producing all military goods. It then decides to produce a mix of civilian and military goods represented by point B. What represents the costs in military goods given up?
What will be an ideal response?
Supply-side policy is designed to
A. Shift the production possibilities curve outward and shift the long-run aggregate supply curve to the right. B. Shift the production possibilities curve outward and shift the aggregate supply curve to the left. C. Move the economy from a point inside the production possibilities curve to a point on the curve and shift the aggregate supply curve to the right. D. Move the economy from a point inside the production possibilities curve to a point on the curve and shift the aggregate supply curve to the left.
Assume the price of product Y (the quantity of which is on the vertical axis) is $15 and the price of product X (the quantity of which is on the horizontal axis) is $3. Also assume that money income is $60. The absolute value of the slope of the
resulting budget line: A. is 5. B. is 1/5. C. is 4. D. is 20.