What must a government know for the infant industry argument to be a valid reason for imposing tariffs?
What will be an ideal response?
The government must be able to determine what industries will eventually be able to survive without protection, but cannot survive initially without protection. Hence, they would need to know a great deal about technology in the industry, input prices, world demand for the good, and many other things.
You might also like to view...
When the quantity of capital increases, then the
A) LAS curve shifts rightward and the SAS curve does not shift. B) SAS curve shifts rightward and the LAS curve does not shift. C) SAS curve shifts rightward and the LAS curve shifts rightward. D) SAS curve shifts rightward and the LAS curve does shifts leftward.
A firm is producing 2,500 units at its optimal output, with average variable cost per unit of $4 and average fixed cost per unit of $2.50. If sells its output at $8 per unit, total profit is
A. $10,000. B. $3,750. C. $1,500. D. $20,000
What happens to the marginal revenue product curve of a factor as more of a complementary factor is hired?
A) It shifts to the left, because its marginal product decreases. B) It shifts to the left, because its marginal product increases. C) It shifts to the right, because its marginal product decreases. D) It shifts to the right, because its marginal product increases.
Assume an economy is operating on its production possibilities curve, which shows the production of military and civilian goods. If the output of military goods is increased, the output of civilian goods:
A) will increase too. B) will not change. C) must decrease. D) may increase or decrease.