Suppose the price of an airline ticket from Dallas to Boston costs $600 . A bus ticket costs $150 . Traveling by plane takes 6 hours compared with 51 hours by bus. Other things constant, an individual would gain by choosing air travel if, and only if, his time were valued at more than

Which of the following statements is TRUE?

A) The infant-industry argument is valid only if the benefits of learning-by-doing in the infant industry spill over to other parts of the economy. B) A subsidy to an infant industry is a more efficient way to protect it from foreign competition than a tariff on the competing foreign goods. C) Both statements are true. D) Neither of the statements is true.

In building a model the assumption that allows economists to study only the factors being analyzed is the

A) rationality assumption. B) ceteris paribus assumption. C) the self-interest assumption. D) the scarcity assumption.