Which of the following describes the infant industry argument for protectionism?
A) Domestic producers require time to gain experience and lower their unit costs; this will allow these producers to compete successfully in international markets.
B) Domestic producers in high-wage countries must be protected from foreign producers in low-wage countries to produce a level playing field.
C) An industry must be protected in its early stages of development so that firms can compete with government-subsidized foreign competition.
D) Some strategic industries must be protected to ensure adequate supplies of resources needed for national defense in emergencies.
A
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A firm is currently producing 200 units of output using 60 hours of labor and 80 hours of capital. The marginal product of labor is 12 units of output per hour, and the marginal product of capital is 15 units of output per hour. If the wage rate is $6 per hour and the rental rate is $3 per hour, then
a. the firm's use of labor and capital is cost-efficient. b. the firm should use more labor and less capital. c. the firm should use more capital and less labor. d. we cannot determine if the firm's use of inputs is efficient without more information.
If a product is a normal good, then its income elasticity of demand is
A) zero. B) positive. C) negative. D) indeterminate. E) greater than 1.
Subject to the approval of the Board of Governors, the decision of choosing the president of a district Federal Reserve Bank is made by
A) all nine district bank directors. B) the six district bank directors elected by the member banks. C) three district bank directors who are professional bankers. D) district bank directors who are not professional bankers. E) class A and class B directors.
All of the following are characteristics of a proprietorship EXCEPT
A) the business is owned by one individual. B) one person is responsible for all the debts of the firm. C) one person gets all of the profits. D) the firm can form a corporation to protect itself against the debts.