A problem with the infant industry argument is that
A. it is almost impossible to eliminate the tariff once the industry matures.
B. it is too restrictive in targeting new industries to protect.
C. it allows infant industries to mature so that tariffs can be eliminated.
D. it does not protect the most important new industries in a country.
Answer: A
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Which of the following contributed to the negative output ratio experienced in the 1970s?
A) depreciation of the dollar B) favorable oil price shocks C) favorable farm price shocks D) All of the above
Which of the following strategies are used by business firms to capture consumer surplus?
A) Price discrimination B) Bundling C) Two-part tariffs D) all of the above
When government spending and tax revenue are equal, G = T, the economy
a. must be in equilibrium b. has achieved full employment without inflation c. has a budget deficit d. has a budget surplus e. has a balanced budget
Van, whose utility of wealth curve is shown in the above figure, owns a home that is valued at $100,000. There is a 10 percent chance that the house will be destroyed by hurricane. The value of insurance to Van is
A) $10,000. B) $15,000. C) $20,000. D) $30,000.