The infant industry argument for protectionism suggest that an industry must be protected in the early stages of its development so that:
a. firms will be protected from subsidized foreign competition.
b. domestic producers can attain the economies of scale to allow them to compete in world markets.
c. there will be adequate supplies of crucial resources in case they are needed for national defense.
d. domestic unemployment will be reduced.
Question 2
Workers in industrial countries earn much higher wages than workers in developing countries because:
a. the industrial countries are labor rich and capital poor economies.
b. the industrial countries lack a steady supply of unskilled laborers.
c. the industrial countries produce labor intensive goods.
d. the marginal productivity of labor is low in the industrial economies.
e. the marginal productivity of labor is high in the industrial economies.
