Economists believe the most persuasive argument for protectionism is to protect infant industries. But the argument has a drawback. What is this drawback?
A) Governments always make the level of protection for infant industries too high.
B) Governments are usually too impatient and do not allow protection to remain in place long enough to allow industries to be competitive in international markets.
C) Governments usually use tariffs, rather than quotas, to protect infant industries in order to collect tariff revenue. (Quotas do not result in government revenue).
D) Protection lessens the need for firms to become productive enough to compete with foreign firms; this often results in infant industries never "growing up."
Answer: D
You might also like to view...
Which of the following does not arise from price discrimination?
A) an increase in quantity sold B) an increase in profits C) an increase in consumer surplus D) an increase in producer surplus
The national manifest system,
a. tracks only the most toxic hazardous wastes b. tracks hazardous and nonhazardous wastes from the point of generation to disposal c. was eliminated with the 1984 RCRA amendments d. is a market-based approach aimed at achieving an efficient solution e. none of the above
Average cost pricing is permitted
A. when a service is produced by a natural monopoly. B. when few firms have the incentive to provide a service. C. in price-taking markets. D. when firms exhibit diseconomies of scale.
An economy in which output has decreased and prices have decreased would suggest a:
A. decrease in short-run aggregate supply. B. increase in aggregate demand. C. increase in short-run aggregate supply. D. decrease in aggregate demand.