This Application illustrates
A) how U.S. domestic manufacturers of auto parts have been adversely affected in recent years.
B) that U.S. parts manufacturers are now facing increasing global pressures.
C) the trade-offs inherent in a global economy.
D) all of the above.
D
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Compared to taxing pollution, an advantage of auctioning pollution permits is that:
A. it allows the public to directly reduce pollution by purchasing permits. B. it ensures that all firms reduce pollution by the same amount. C. the largest reductions in pollution are made by the firms that can do so the most cheaply. D. auctioning permits raises revenue for the government.
The rapid growth of China's economy relative to the United States has benefitted U.S. consumers because
A) U.S. consumers can purchase more lower-priced goods made in China. B) competition from China has made jobs harder to find in the United States. C) goods made in China are always of higher quality than goods made in the United States. D) the United States has comparative advantage in more goods than China does.
According to the No Marginal Improvement Principle, if X* is the best choice, then:
A. MB must be greater than MC at X*. B. MB must be equal to MC at X*. C. MB must be less than MC at X*. D. MB must be greater than or equal to MC at X*.
Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C