Which of the Following Statements Is True

question 44

Multiple Choice

Which of the following statements is true?

• A) The infant-industry argument is valid only if the benefits of learning-by-doing in the infant industry spill over to other parts of the economy.
• B) A subsidy to an infant industry is a more efficient way to protect it from foreign competition than a tariff on the competing foreign goods.
• C) Both statements are true.
• D) Neither of the statements is true.

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Definitions:

Supply Curve

A visual chart that illustrates how the quantity of a product or service provided correlates with its price over a specific time frame.

Quantity Demanded

The aggregate quantity of a product or service that buyers are ready and capable of buying at a certain price during a defined time frame.

Demand

The willingness and financial capacity of individuals to buy goods and services at certain price levels.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, resulting in a stable market condition.