4. (8) Why is it necessary to use a market failure to justify the use of infant industryprotection?25. (8) What is a positive externality? Explain the argument of knowledge spilloversas a potential reason for infant industry protection.6. (6) If infant industry protection is justified, is it better for the Home country to usea tariff or a quota, and why?

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4. (8) Why is it necessary to use a market failure to justify the use of infant industry protection?

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter3: Economic Decision Makers

Section: Chapter Questions

Problem 3.12P

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Question

4. (8) Why is it necessary to use a market failure to justify the use of infant industry
protection?
2
5. (8) What is a positive externality? Explain the argument of knowledge spillovers
as a potential reason for infant industry protection.
6. (6) If infant industry protection is justified, is it better for the Home country to use
a tariff or a quota, and why?

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