Suppose there is a policy debate regarding the United States’ imposing trade restrictions on imported tires.
A congresswoman from a state with several tire factories argues that the United States should threaten to impose a tariff on Chinese tires in order to induce the Chinese to remove its tariff on American cars.
Which of the following justifications is the congresswoman using to argue for the trade restriction on tires?
a. Infant-industry argument
b. Jobs argument
c. National-security argument
d. Using-protection-as-a-bargaining-chip argument
e. Unfair-competition argument
Answer: c. National-security argument
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If a firm's average total cost is less than price where MR = MC
A) the firm should shut down. B) the firm should cut back on its output to lower its cost. C) the firm should continue to produce the output it is producing. D) the firm should raise its price.
The quantity of a good that consumers demand depends only on the price of the good
Indicate whether the statement is true or false
ABC Company incurs a cost of 50 cents to produce a dozen eggs, while XYZ Company incurs a cost of 70 cents to produce a dozen eggs. Which of the following price increases would cause both companies to experience an increase in producer surplus?
a. The price of a dozen eggs increases from 40 cents to 55 cents. b. The price of a dozen eggs increases from 55 cents to 70 cents. c. The price of a dozen eggs increases from 55 cents to 75 cents. d. All of these price increases would cause both companies to experience a loss in producer surplus.
According to Say's law, there can be
A) neither a general overproduction nor a general underproduction of goods. B) a general overproduction but not a general underproduction of goods. C) a general underproduction but not a general overproduction of goods. D) both a general overproduction and a general underproduction of goods.