Refer to Figure 9-3. Without the quota, the domestic price of peanuts equals the world price which is $2.00 per pound. What is the quantity of peanuts supplied by domestic producers in the absence of a quota?
A) 10 million pounds B) 28 million pounds C) 30 million pounds D) 40 million pounds
A
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If the Federal Reserve is currently paying 0.75% interest on bank reserves, but then increases that interest rate to 1%, banks may decide to hold ________ reserves, and the money supply may ________.
A. more; decrease B. more; increase C. fewer; decrease D. fewer; increase
Only a small proportion of corporate stock owners have incomes under $100,000
Indicate whether the statement is true or false
Suppose that an individual has chosen not to work. Then a change in the wage rate:
A. creates a substitution effect, but no income effect. B. creates an income effect, but no substitution effect. C. creates both and income and substitution effect. D. creates neither an income effect nor a substitution effect.
If OPEC raises the price of oil and production costs increase, this may cause
A. Demand-pull inflation. B. Super-pull inflation. C. Cost-push inflation. D. Hyperinflation.