An Example of Policies Designed to Encourage the Development of New

question 3

Multiple Choice

An example of policies designed to encourage the development of new industries whose products can be readily exported would be:

• A)taxing exports of skilled-labor-intensive goods.
• B)subsidizing imports to the domestic market.
• C)providing subsidies to domestic industries that exploit the country's comparative advantage.
• D)imposing tariffs on imports of skilled-labor-intensive goods.

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Definitions:

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing for significant influence over pricing.

Product Differentiation

The process of distinguishing a product or service from others, to make it more attractive to a particular target market.

MC = P

A formula indicating that in perfect competition, the price (P) is equal to the marginal cost (MC) of producing an additional unit.

Economic Profits

The variance between complete earnings and aggregate expenses, taking into account both overt and covert costs.