A quota is
A. An elimination of trade to nurture an infant industry.
B. A prohibition against trading a good.
C. A limit on the quantity of a good that may be imported in a given time period.
D. A tax imposed on imported goods.
Answer: C
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A man who thinks he would save money by driving to work rather than taking the bus, but who nonetheless elects to take the bus because driving in rush-hour traffic frightens him, is
A) behaving inefficiently. B) choosing what is for him the most efficient way to commute. C) rejecting economic efficiency for personal reasons. D) wasting scarce resources.
In the one-input model of production, increasing marginal product implies non-convexity of the producer choice set.
Answer the following statement true (T) or false (F)
Which of the following is a similarity between a monopoly and an oligopoly with differentiated products?
A) There are no barriers to entry in both markets. B) The long-run equilibrium price in both markets exceeds marginal cost. C) There is a single seller in both markets. D) Firms in both the markets earn zero profit in the long run.
The original Keynesian economic theory states that
A) the short-run aggregate supply (SRAS) curve is always vertical. B) many prices would not decline even when aggregate demand decreases. C) wages tend to fall more quickly than the overall price level. D) the economy naturally self-regulates so as to reach full employment quickly.