An Assumption Behind the Infant- Industry Argument for Tariff Protection

question 115

Multiple Choice

An assumption behind the infant- industry argument for tariff protection is that

• A) foreign competitors are selling output below average cost.
• B) the market needs additional competition to satisfy consumer demand.
• C) the domestic industry will eventually gain a comparative advantage in producing the good.
• D) the domestic industry will be facing an upward adjustment in its average cost.

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Definitions:

Self-actualization

Achieving one's full potential and talents, seen as a universal desire or drive.

Safety

The state of being safe from or not exposed to danger, risk, or harm.

Social

Relating to society, or the organization and functioning of human communities.

Maslow Hierarchy

A theory in psychology proposed by Abraham Maslow, depicting a five-tier model of human needs, arranged in a pyramid with basic needs at the bottom and self-actualization at the top.