Refer to the following graph.
The massive increase in defense spending is best represented by the:
A. AD curve shifting from AD1 to AD0.
B. SAS curve shifting from SAS0 to SAS1.
C. SAS curve shifting from SAS1 to SAS0.
D. AD curve shifting from AD0 to AD1.
Answer: D
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When a transfer price is set higher
a. the buying division will want to sell less to the selling division b. the buying division will want to sell more to the selling division c. the selling division will want to sell less to the buying division d. the selling division will want to sell more to the buying division
The Department of Justice has challenged the merger of two firms, and the case has ended up in the Supreme Court. The two firms argue that they will not use their monopoly power to raise prices or to cut output. Under what judicial standard would their merger be allowed, and under what judicial standard would their merger be disallowed?
Economics is the study of the allocation of scarce resources and scarce time, and the ways in which people utilize those resources or that time
a. True b. False Indicate whether the statement is true or false
Which of the following statements is true of the impact of trade restrictions on domestic employment?
a. Domestic firms will produce the goods that otherwise would have been produced abroad, thus employing foreign workers instead of domestic workers. b. Beside the protected industry, other industries will also benefit in terms of employment. c. Domestic consumers will be required to pay lower prices for the output of the protected industry. d. Restrictions imposed on trade simply redistribute jobs by creating employment in the protected industry and reducing employment elsewhere. e. If other countries retaliate by restricting the entry of the domestic exports, the output of domestic firms that produce for export will rise.