Consistent with the mercantilist theory, the colonies had
(a) a trade deficit with England.
(b) a trade surplus with England.
(c) a balance of trade with England.
(d) about an equal number of annual trade deficits and surpluses over the years.
(a)
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Return to the market for cigarettes from the previous questions. Suppose the government implements the tax you found in the previous question. But suppose the government is making a mistake. The true demand curve is in fact , and this is not a result of any behavioral bias. Compute the deadweight loss of the government's tax policy
a. DWL = 0. b. DWL = 500. c. DWL = 1,000 d. DWL = 2,500.
An increase in the supply of oranges in a town drives down its price by 5 percent. Which of the following changes will be observed in the market?
a. The demand for oranges will decrease. b. The demand for oranges will increase. c. The quantity of oranges demanded will increase. d. The quantity of oranges demanded will decrease.
The tax treatment of corporate profit means that corporations
a. cannot profitably issue common stock. b. choose investment opportunities more efficiently than do other types of firms. c. limits the things in which corporations can invest. d. can generally avoid paying federal taxes but not state taxes.
Given the supply and demand conditions illustrated in Figure 3-2, the equilibrium price of steak is
a. $2 per pound. b. $4 per pound. c. $6 per pound. d. $8 per pound.