Refer to the above figure. If a price floor of $5 was set
A. there would be a shortage of 40 units.
B. there would be a shortage of 20 units.
C. there would be a surplus of 40 units.
D. the quantity sold would be 80 units.
Answer: C
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Relative to free trade, domestic producers of a good are ________ off with a tariff because of the ________
A) better; higher price and greater quantity sold B) better; higher price and smaller quantity sold C) better; lower price and greater quantity sold D) worse; lower price and smaller quantity sold E) worse; higher price and greater quantity sold
Public goods are not normally characterized by the following:
a. externalities b. market provision c. the free rider problem d. non-exclusion e. all the above characterize public goods
Which of the following factors would be most likely to encourage investment and capital formation in a less-developed nation?
a. High and variable rates of inflation. b. Tariffs and quotas that restrict international trade. c. A legal system that provides for secure property rights and evenhanded enforcement of contracts. d. High marginal tax rates.
Shawn determines that if Lexall Corporation has high revenues, then Waters Corporation will have low revenues, and that if Lexall Corporation has low revenues, then Waters Corporation will have high revenues. Shawn buys stock in both corporations
a. He has reduced firm-specific risk but not market risk. b. He has reduced market risk, but not firm-specific risk. c. He had reduce both firm-specific risk and market risk. d. He has reduced neither firm-specific risk nor market risk.