Infant industry protection can be justified in theory by:
A. both the "learning by doing" argument and the existence of economies of scale.
B. neither the "learning by doing" argument nor the existence of economies of scale.
C. the existence of economies of scale but not by the "learning by doing" argument.
D. the "learning by doing" argument but not by the existence of economies of scale.
Answer: A
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What will be an ideal response?
Assume that supply increases greatly and demand increases slightly. Which of the following will happen?
a. Equilibrium price will fall and equilibrium quantity will rise. b. Equilibrium price will rise and equilibrium quantity will fall. c. Equilibrium price will rise and equilibrium quantity will rise. d. Equilibrium price will fall and equilibrium quantity will fall. e. Neither equilibrium price nor equilibrium quantity will change.
A nonneutral tax cannot be used to reduce distortions created by another nonneutral tax.
Answer the following statement true (T) or false (F)
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A. no change; an increase B. a decrease; a decrease C. no change; a decrease D. an increase; an increase