Why Is It Better to Protect an Infant Industry with Monopoly

question 138

Multiple Choice

Why is it better to protect an infant industry with monopoly power with a tariff than a quota?

• A) A tariff causes domestic production to increase, whereas a quota causes production to decrease.
• B) A tariff causes domestic production to decrease, whereas a quota causes domestic production to increase.
• C) A tariff will raise the domestic price above the world price, whereas a quota will not.
• D) A quota will raise the domestic price above the world price, whereas a tariff will not.

---

Definitions:

Drive Theories

Theories in psychology that explain motivation as being driven by the need to fulfill basic biological needs.

Psychogenic Needs

are psychological desires or motivations that drive individual behaviors, often subconscious in nature.

Expectancy Theories

A group of theories that explain how people determine the likelihood of a specific outcome based on their actions, beliefs about their abilities, and the perceived likelihood of achieving their goal.

Need For Power

An individual's desire to control or influence others.