The infant industry argument for protectionism suggest that an industry must be protected in the early stages of its development so that:
a. firms will be protected from subsidized foreign competition
b. domestic producers can attain the economies of scale to allow them to compete in world markets.
c. there will be adequate supplies of crucial resources in case they are needed for national defense.
d. domestic unemployment will be reduced.
b
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The economic analysis of extending the duration of unemployment benefits to 99 weeks involves both positive and normative analysis. Consider the following consequences of extending the duration of unemployment benefits:
a. Extending the duration of unemployment benefits to 99 weeks will create less incentive for some unemployed workers to seek employment. b. Extending the duration of unemployment benefits to 99 weeks will increase the total amount of government expenditure on unemployment benefits. c. The benefits received by those collecting unemployment benefits should be valued more highly than the increase in government expenditure needed to pay the benefits. d. By extending the duration of unemployment benefits to 99 weeks, the unemployed will have more time to acquire new skills before reentering the workforce. Which of the consequences above are positive statements and which are normative statements? A) a and b are positive statements; c and d are normative statements. B) Only b is a positive statement; a, c, and d are normative statements. C) a and d are positive statements; b and c are normative statements. D) a, b, and d, are positive statements; only c is a normative statement.
Industry demand is given by: QD = 1000 – P
All firms in the industry have identical and constant marginal and average costs of $50/unit. a. If the industry is perfectly competitive, what will industry output be? What will be the equilibrium price? What profit will each firm earn? b. Now suppose that there are five firms in the industry, and that they collude to set price. What price will they set? What will be the output of each firm? What will be the profit of each firm?
An economic recession in the United States would shift the demand for foreign currencies outward, that is, increase demand
a. True b. False Indicate whether the statement is true or false
Exhibit 11-5 A perfectly competitive labor market Quantity of Labor (thousands) Marginal Revenue Product Wage Rate 5 $25.00$ 5.00 10 20.0010.00 1515.0015.00 2010.0020.00 255.0025.00? ? In Exhibit 11-5, when the marginal revenue product is $20.00, firms should
A. continue hiring workers. B. stop hiring workers. C. start firing workers. D. pay a wage above $15.00 to its workers