To evaluate the potential impact of introducing the hybrid Prius auto into the U.S. market, Toyota Motor Corporation would use:
A. normative economic analysis.
B. positive economic analysis.
C. forensic analysis.
D. negative economic analysis.
B. positive economic analysis.
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Firms in monopolistic competition compete by selling similar, but not identical products
Indicate whether the statement is true or false
According to the Federal Reserve, household wealth in the United States fell by more than $11 trillion in 2008
Predict the effect this decrease in wealth had on the equilibrium real wage and level of employment, and use a graph to support your answer.
Which of the following is the best example of a quota?
a. a tax placed on all small cars sold in the domestic market b. a limit imposed on the number of men's suits that can be imported from a foreign country c. a subsidy from the U.S. government to domestic manufacturers of men's suits so they can compete more effectively with foreign producers of men's suits d. a $100-per-car fee imposed on all small imported cars
Which of the following illustrates the principle of second best?
A. The government decides to impose taxes on all automobiles rather than imposing a tax only on luxury automobiles. B. The government imposes a tax on a meat processing plant that equals the cost of cleaning the lake damaged by the waste discharged into the lake by the meat processor. C. A tax imposed on land, because this tax distorts economic decisions less than taxes on other factors of production. D. The government imposes taxes on cigarettes and the tax revenue collected is used to pay for health care.