For the infant-industry argument for tariffs to be appropriate, it is necessary that
A) the industry be deemed essential by the government.
B) the government can identify which industries will eventually be able to compete with more established foreign producers.
C) only industries that currently are operating efficiently will be protected.
D) the country has access to the most modern production techniques.
B
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If the demand for a firm's output is perfectly elastic, then the firm's Lerner Index equals
A) zero. B) one. C) infinity. D) one-half.
The Laffer curve shows as tax rates rise, tax revenue:
a. rises. b. first rises, then falls, and then rises again. c. falls. d. first rises, and then falls. e. remains at a constant level.
If total profit is maximized, then marginal cost must equal marginal revenue
a. True b. False Indicate whether the statement is true or false
A firm should continue to operate even at a loss in the short run if:
A. Its output is above the break-even point B. Its revenues are less than its fixed costs C. It can cover its variable costs and some of its fixed costs D. It has some fixed costs that cannot be brought down to zero