Critique the infant industry or the labor argument for protection
What will be an ideal response?
Critique of the labor argument largely rests on the confusion between nominal wage rate differences and productivity wages.
Critique of the infant industry argument is based on 1 ) the rent seeking and misapplication of what it means to be an "infant" industry, 2 ) the government's ability to correctly identify such industries vs. the market's ability to do so, 3 ) the protection creates disincentives for efficiency and low-cost production.
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In the above figure, while drawing the line showing the relationship between the price of a pound of peanuts and the quantity sold, the
A) price of a pound of pecans does not change. B) price of a pound of peanuts does not change. C) the quantity of peanuts that farmers supply does not change. D) Both answers A and B are correct. E) Both answers B and C are correct.
Christina Romer's estimates of the business cycles prior to World War II showed that the business cycle
A) had greater fluctuations before World War II than previous estimates had shown. B) had smaller fluctuations before World War II than previously estimated. C) had smaller fluctuations before World War II than after World War II. D) had larger fluctuations after World War II than had been previously measured.