Refer to Figure 18.4. With free trade, what is the equilibrium quantity of gloves in Duckland?
A) 100 B) 80 C) 60 D) 40
A
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Albatross Software has two main products: WindSong is a program that can be used to edit audio files and SunBurst is a program that can be used to edit digital photos. The two major types of customers are small businesses and home users
The small business customers have a reservation price of $300 for WindSong and $450 for SunBurst. The home users have a reservation price of $100 for WindSong and $125 for SunBurst. Which of the following statements is true? A) Bundling the two software products is not likely to be profitable because the marginal cost of producing software is positive by very small. B) Bundling the two software products is not likely to be profitable because the consumer demands are homogeneous. C) Bundling the two software products is likely to be profitable because the demands are negatively correlated. D) Bundling the two software products is not likely to be profitable because the demands are positively correlated.
Suppose ABC Dairy is one firm competing in the perfectly competitive market for milk. Now suppose ABC Dairy decides to produce only organic milk. Which of the following best describes the effects of this change in the market?
A. ABC Dairy is differentiating its product and will likely be able to charge a higher price than before. B. ABC Dairy will still be a price taker because it is still operating in a perfectly competitive market. C. ABC Dairy will have a monopoly on organic milk due to very high entry barriers. D. The other dairy firms will produce with excess capacity, but ABC Dairy will be efficient.
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y1. C. P3 and Y1. D. P3 and Y2.
Which of the following is an example of a countervailing duty?
A) A tariff is granted because foreign firms are selling below cost. B) A temporary tariff is granted to allow for adjustment of the domestic industry. C) A tariff is granted to an industry because foreign firms are subsidized by their governments. D) A tariff is granted to an industry because another nation persistently uses unfair trade practices.