Question

company z is a u.s. company that has just entered the market for a given good and is the first in this country to produce that good. the good is already being produced in many foreign countries and is exported to the united states. if company z wants to restrict this foreign competition, it will most likely use which of the following arguments?

job-creation
infant-industry
anti-dumping
national-defense

Explanation:

Analyze the scenario and company characteristics

Using the Trade Restrictions Arguments knowledge point

Company Z is a U.S. firm that has just entered the market for a given good and is the first in the country to produce it. However, the good is already established and produced by many foreign competitors. Because Company Z is a newly established domestic producer facing mature foreign competition, it is in its infancy stage within the domestic market.

Evaluate the applicable trade restriction arguments

Using the Trade Restrictions Arguments knowledge point

• Infant-industry argument: This argument states that new domestic industries need temporary protection from established foreign competitors until they can mature, achieve economies of scale, and become competitive. This matches Company Z's situation perfectly.
• Job-creation argument: Focuses on saving or creating domestic jobs generally, rather than protecting a specific newly introduced domestic industry.
• Anti-dumping argument: Applies when foreign producers sell goods below cost or fair market value, which is not indicated here.
• National-defense argument: Applies to industries vital for national security, which is not specified for this general good.

Answer:

• job-creation
• infant-industry (Correct answer)
• anti-dumping
• national-defense