Assuming a Firm Would Not Survive Without Protection, What Should

question 163

Multiple Choice

Assuming a firm would not survive without protection, what should the government do if the present value of the profits and value added from operating an infant industry firm exceed the deadweight loss of imposing protection?

• A) It should impose the tariff-the gains exceed the losses.
• B) It should not impose the tariff-the losses exceed the gains.
• C) If it imposes the tariff, it may actually create more problems that cannot be foreseen-do not impose the tariff.
• D) The government should just ban all imports of that product until the "infant" is able to compete on its own.

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Definitions:

Confounding Variable

An outside influence that changes the effect of a dependent and independent variable on each other, potentially skewing the results of a study.

Factor Being Studied

The specific element or variable that is being investigated or examined in research or experiments.

Influence Study's Results

Factors or variables that can affect the outcome or findings of a research study.

Randomly Assign Participants

A method used in experiments where individuals are assigned to groups in a way that each participant has an equal chance of being placed in any group, reducing bias and variability.