If steak is a normal good and its price rises:
A) the amount purchased may either increase or decrease depending on the relative importance of the income and substitution effects.
B) both the income and substitution effects suggest that less will be purchased.
C) the substitution effect suggests more will be purchased, but the income effect suggests less will be purchased.
D) the income effect suggests more will be purchased, but the substitution effect suggests less will be purchased.
Ans: B) both the income and substitution effects suggest that less will be purchased.
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The effective rate of protection measures
A) the "true" ad valorem value of a tariff. B) the quota equivalent value of a tariff. C) the efficiency with which the tariff is collected at the customhouse. D) the protection given by the tariff to domestic value added. E) the difference between domestic and foreign prices of the import.
If product price decreases, then:
a. MP will increase. b. MFC will increase. c. MRP will increase. d. MRP will decrease.
Diversification
A) maximizes risk. B) maximizes profit. C) minimizes risk. D) minimizes costs.
Splitting up a monopoly is often justified on the grounds that
a. consumers prefer dealing with small firms b. small firms have lower costs c. competition is inherently efficient d. nationalization is a less preferred option e. monopolies are inevitable and desirable