The Infant-Industry Argument About Tariffs Implies That

question 111

Multiple Choice

The infant-industry argument about tariffs implies that

• A) it is unfair to levy tariffs on items intended for use by infants.
• B) tariffs should be levied on foreign products that compete with new domestic industries only in the short run.
• C) if a newly established domestic industry can survive in the short run, a tariff should be levied to protect it from foreign competition in the long run.
• D) permanent tariffs should be levied on foreign products that compete with those produced by newly established domestic industries.

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Definitions:

Direct Materials Cost

The cost of raw materials directly used in the production of products or services.

Sales

Revenue generated from the sale of goods or services.

Desired Profit

The target earnings a company aims for in a specific period as part of its financial and strategic planning.

Unit Variable Cost

The cost associated with producing one additional unit of a product, excluding fixed costs.