The effect of a tariff or a quota is to
a. raise the price of a commodity in the exporting country above the price in an importing country.
b. raise the price of a commodity in an importing country above the price in the exporting country.
c. lower the price of the commodity in all countries.
d. raise the price of the commodity in all countries.
b
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The “law” of diminishing returns rests on the “law” of variable input proportions.
Answer the following statement true (T) or false (F)
With a 10% reserve requirement ratio, a $100 deposit into New Bank means that the maximum amount New Bank could lend is
A) $90. B) $100. C) $10. D) $110.
In maximizing net gains, the perfectly competitive firm will seek to:
a. minimize average variable cost. b. minimize average total cost. c. minimize marginal cost. d. maximize profit.
The market tends to underproduce public goods.
Answer the following statement true (T) or false (F)