An Assumption Behind the Infant Industry Argument for Tariff Protection

question 70

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 domestic industry will be facing an upward adjustment in its average cost.
• C) the domestic industry will eventually gain comparative advantage in producing the good.
• D) the market needs additional competition to satisfy consumer demand.

---

Definitions:

Confidence Interval

A range of values that is believed to contain an unknown population parameter, calculated from a given set of sample data.

Sample Variance

A statistical measure of the dispersion of observations in a sample dataset around the sample mean.

T Distribution

A family of probability distributions that can be used to develop an interval estimate of a population mean whenever the population standard deviation s is unknown and is estimated by the sample standard deviation s.

Variance

A measure of the spread between numbers in a data set, indicating how much the numbers differ from the mean.