The higher price of imported products due to trade barriers causes some consumers to shift their purchases to a domestically produced product that is now
A. lower in price because import competition has declined.
B. higher in price because import competition has declined.
C. lower in price because import competition has risen.
D. higher in price because import competition has risen.
Answer: B
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The initial equilibrium price in the market for Web pages is $200 per page and 1000 Web pages are created in a month. Many new Web design firms now enter the market. As a result,
A) the supply of Web pages increases and the price falls. B) the supply curve of Web pages shifts leftward and the price falls. C) the demand for Web pages increases and the price rises. D) the supply of web pages increase and the price falls, which then increases the demand for Web pages and the demand curve shifts rightward. E) the demand for Web pages increases and the price falls.
Any production point outside the production possibilities frontier is
A) unattainable. B) associated with unused resources. C) attainable only if prices fall. D) attainable only if prices rise.
Money's function as a medium of exchange means that
A) money is a common denominator for expressing the prices of goods and services. B) money can be used to store wealth. C) money serves as an acceptable means of payment. D) money requires a double coincidence of wants.
If a price hike of 5 percent increases the quantity demanded of another good by 2 percent, the goods must be ________ and the cross elasticity of demand equals ________
A) substitutes; 0.40 B) substitutes; 2.5 C) complements; 0.40 D) complements; 2.5