A free trade area differs from a customs union in that
a. in a free trade area, members can establish their own tariff policies with respect to nonmembers
b. in a free trade area, the rules are binding on members, but in a customs union they are mere guidelines
c. a free trade area strives for low tariffs, but a customs union strives for high tariffs
d. a free trade area uses a standardized currency, but in a customs union each nation retains its own currency
e. the rules of a free trade area only apply to trade with nonmembers, but in a customs union the rules apply only to trade with members
A
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A) rise; decrease B) not change; increase C) fall; increase D) fall; decrease E) rise; increase
If a monopoly is operating on the demand curve where price elasticity is equal to -3, and MR equals 2, then price is equal to
A) 3. B) 2. C) 1. D) 0.
Another term for equilibrium price is
a. dynamic price. b. market-clearing price. c. quantity-defining price. d. balance price.
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A) lower; sale; raise B) lower; purchase; raise C) lower; purchase; lower D) raise; sale; lower E) raise; purchase; raise