Explain the infant industry argument case against free trade
What will be an ideal response?
The argument is that a young industry that may need temporary protection from competition from the established industries of other countries to develop an acquired comparative advantage.
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The assumption that regulation relentlessly seeks out deadweight loss and seeks to eliminate it is called the
A) social interest theory of regulation. B) capture theory of regulation. C) Coase theory of regulation. D) socially optimal theory of regulation. E) predatory theory of regulation.
Refer to Figure 9.9. Now suppose an import quota of 3000 trucks is imposed. Government revenue from the quota will be
A) $0. B) $2,500. C) $7,500,000. D) $12,500,000. E) $13,125,000.
Unemployment benefits tend to be higher in Europe and are offered for longer periods than in the United States
a. True b. False
A U.S. firm currently produces 200 units of output according to the production function q = L0.5K0.5 and faces input prices equal to wU.S. = rU.S = $11. Should the U.S. firm move their company abroad where they will face input prices equal to wabroad = $6.50 and rabroad = $15.00?
A) Yes, because the total costs will fall from $3,859 to $2,810. B) No, because the total costs will increase from $2,810 to $3,859. C) No, because the firm has decreasing returns to scale. D) Not enough information is given to answer this problem.