The infant industry argument is that:
a. those industries that produce products for infants should be protected.
b. protectionism will provide consumers with lower prices.
c. protectionism should be used to create a level playing field for the domestic firms to compete with foreign firms.
d. protectionism promotes complete specialization in the country on the basis of comparative advantage.
e. new industries should be protected from foreign competition until they have had adequate time to develop.
Question 2
If a nation has cheap labor,
a. it can still benefit from trade.
b. it is unlikely to have a comparative advantage in the production of goods that are highly capital intensive.
c. it cannot have a comparative advantage in everything.
d. all of the above are true.
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