The infant industry argument calls for active government involvement
A) only if the government forecasts are accurate.
B) only if some market failure can be identified.
C) only if the industry is not one already dominated by industrial countries.
D) only if the industry has a high value added.
E) only if the industry is independently able to earn high returns.
B
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Answer the following statement(s) true (T) or false (F)
1. The marginal cost of producing tea can be measured in dollars per pound of tea. 2. A firm's revenue can be calculated from its demand curve using the formula "price times quantity." 3. Fixed costs have no effect on a firm's profit. 4. Profits will be positive as long as marginal revenue is greater than marginal cost. 5. If marginal cost exceeds marginal revenue, then a reduction in output will create higher profits.
Trade is often restricted because the
A) gain per producer is larger than the loss per consumer. B) total gain to all producers is larger than the total loss to all consumers. C) gain per producer is less than the loss per consumer. D) total gain to all producers is smaller than the total loss to all consumers. E) gain per consumer is larger than the loss per producer.
Assume a market that has an equilibrium price of $8. If the market price is set at $7, consumer surplus:
A. rises for some because of the decreased price. B. decreases for some because of fewer transactions taking place. C. Both of these statements are true. D. Neither of these statements is true.
The MC = MR rule for profit maximization applies to monopolists, as well as to firms in perfect competition
Indicate whether the statement is true or false