A common argument in favor of restricting trade
a. concerns the strategy of bargaining.
b. is that efforts should be made to get new industries started.
c. emphasizes the belief that all countries should play by the same rules.
d. All of the above are correct.
d
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Refer to Figure 4-8. To legally drive a taxicab in New York City, you must have a medallion issued by the city government. Assume that only 13,200 medallions have been issued
Let's also assume this puts an absolute limit on the number of taxi rides that can be supplied in New York City on any day, because no one breaks the law by driving a taxi without a medallion. Assume as well that each taxi provides 6 trips per day. In that case, the quantity of taxi rides supplied is 79,200 (or 6 rides per taxi × 13,200 taxis). This is shown in the diagram with a vertical line at this quantity. Assume that there are no government controls on the prices that drivers can charge for rides. a. What would the equilibrium price and quantity be in this market if there was no medallion requirement? b. If there was no medallion requirement, indicate the area that represents consumer surplus. c. If there was no medallion requirement, indicate the area that represents producer surplus. d. If there was no medallion requirement, indicate the area that represents economic surplus. e. What are the price and quantity with the medallion requirement? f. With a medallion requirement in place, what area represents consumer surplus? g. With a medallion requirement in place, what area represents producer surplus? h. With a medallion requirement in place, what area represents the deadweight loss? i. Based on your answers to parts (c) and (g), are taxicab drivers better off with the medallion requirement for taxicabs than without? j. Are consumers better off with or without the medallion requirement for taxicabs?
Which of the following would cause both the equilibrium price and equilibrium quantity of cotton (assume that cotton is a normal good) to increase?
A) a drought that sharply reduces cotton output B) an increase in consumer income C) a decrease in consumer income D) unusually good weather that results in a bumper crop of cotton
Homer's Donut Shoppe has the production function q = 10L + 20L2 - 5L3. The marginal product of labor is
A) MP = 10 + 40L -15L2 B) MP = 10 + 20L -5L2 C) MP = 10L D) MP = 10 + 20L
A man may be preferred to a woman by an employer who will make a substantial investment in the training of the employee because
A. most employers are sexist and think that women belong in the home caring for children. B. as a group women tend to have a weaker attachment to the labor force than men. C. employers have observed that women are less productive than men on most jobs. D. employers are afraid women will disrupt the workplace by distracting the male employees.