The infant industry argument for trade protectionism holds that
A) new industries sometimes need a protective environment in which to grow so that they can compete with older, more established foreign competitors.
B) foreign competitors are often viewed as "infants" by large U.S. firms.
C) tariffs are often preferred to quotas.
D) quotas raise prices more than tariffs raise prices.
E) a and c
A
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Which of the following is true for a firm with a downward-sloping demand curve for its product?
A) Price equals average revenue but is greater than marginal revenue. B) Price equals average revenue but is less than marginal revenue. C) Price, average revenue, and marginal revenue are all different. D) Price, average revenue, and marginal revenue are all equal.
Although U.S. Steel controlled nearly 75 percent of the domestic iron and steel industry, in 1920 the Supreme Court ruled that the firm was not in violation of the Sherman Antitrust Act because there was no evidence of abusive behavior. What antitrust doctrine was the court applying in this case?
a. The rule of reason. b. The per se rule. c. The marginal cost pricing rule. d. The natural monopoly rule.
Suppose Fiona's base consumption equals $1,000 per month when her income is zero. Fiona earns $5,000 per month, and her marginal propensity to consume is 0.8 . If her monthly income increases by $1,500, her total consumption will be _____
a. $8,400 b. $10,000 c. $6,200 d. $4,800
As the differences in opportunity costs between the U.S. and its trading partners increase, the potential gains from specialization and trade ________.
A. decrease B. stay the same C. become unpredictable D. increase