Suppose that the United States decided to subsidize a major research and development effort by U.S. firms in the semiconductor industry. Under the current rules of the WTO and GATT, the U.S. effort is
A) allowed as long as the subsidies are a small percent of the total cost.
B) allowed as long as the subsidies do not involve a direct payment to the industry.
C) not allowed.
D) allowed as long as the subsidies are for developing a "precompetitive" technology.
D
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A price floor will result in
a. a decrease in price if the price floor is below the market price. b. a decrease in price if the price floor is above the market price. c. an increase in price if the price floor is above the market price. d. the same price as the market price.
Refer to the diagram and assume that price decreases from $10 to $2. The coefficient of the price elasticity of supply (midpoint formula) relating to this price change is about
What will be an ideal response?
Figure 12.1 shows the market for a successful price-fixing arrangement (cartel) between two identical firms. When the two firms act like one and charge the same price, the market price will be ________ and each firm will produce and sell a quantity of ________.
A. $10; 200 B. $10; 100 C. $5; 500 D. $5; 250
Consider someone who borrows $10,000 to buy a car at a fixed interest rate of 9%. If inflation is 3% at the time the loan is made, what is the real interest rate at which the loan must be repaid, and to what level would the interest rate have to rise for the real interest rate on the loan to be zero?
a. 4.5%; 7.5% b. 6; 9% c. 8%; 10% d. 6; 12%