Refer to the graph below, where Sd and Dd are the domestic supply and demand for a product. The world price of the product is $6. What would be the difference in the total revenue received by foreign producers after a quota of 20 units is imposed compared with the total revenue received by foreign producers when a $4 per unit tariff is imposed?
A. $0 revenue difference
B. $80 more revenue with a quota than with a tariff
C. $200 more revenue with a quota than with a tariff
D. $120 more revenue with a tariff than with a quota
B. $80 more revenue with a quota than with a tariff
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Suppose bad weather in Florida unexpectedly results in a much smaller citrus crop than had been projected. This would tend to cause the labor supply curve for citrus pickers to
A) shift to the left, causing the labor demand curve to shift to the left. B) remain unchanged, and the wage rate would tend to increase. C) shift to the right, causing the labor demand curve to shift to the right. D) remain unchanged, and the wage rate would tend to decrease.
Maxine's Cookie Shop sells chocolate chip cookies in a perfectly competitive market for $2 per dozen. Maxine currently produces 200 dozen cookies per day and average total cost at this level of production is $1.75
What level of profit is this firm earning? Explain.
The usefulness of a model is determined by
A) whether it helps to explain or predict real world phenomena. B) whether it possesses realistic assumptions. C) how well it uses the ceteris paribus assumption. D) how many of the possible relationships that exist are included in the model.
Under a laissez-faire system,
A. government organizes production and distribution of goods. B. a small bureaucracy of central planners tells firms what to produce and how to produce it. C. costs of production and consumers’ demands determine the output mix. D. firms try to produce the goods that they think are good for consumers.