Question 7 2 pts The infant industry argument is that: O protectionism promotes

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Question 7 2 pts The infant industry argument is that: O protectionism promotes complete specialization in the country on the basis of comparative advantage. O developing industries should be allowed to face foreign competition O protectionism should be used to create a level playing feld for th domestic firms to compete with foreign firms. those industries that produce products for infants should be protected. 0 new industries should be protected from foreign competition until they have had adequate time to develop. 2 pts D Question 8 The figure below shows the demand (D) and supply (S) curves of corn syrups 15

Explanation / Answer

1. Ans: New industries should be protected from foreign competition untill the have had adequate time to develop.

2. Higher prices for their output, lower profits for the owners and lower wages for workers.

3.Ans: The industries begin to experience diseconomies of scale.

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