This graph demonstrates the domestic demand and supply for a good, as well as a quota and the world price for that good.
As shown in the graph, when a government imposes a quota, the outcome differs from that of a tariff being imposed in that area:
A. G represents quota rents instead of tax revenues.
B. F and H are deadweight loss instead of transferred surplus.
C. FGH is deadweight loss instead of tax revenues.
D. E represents tax revenues instead of transferred surplus.
Answer: A
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Ownership certificates in a company are known as:
a. charter b. stock c. dividends d. debt
Farouk owns a family portrait studio. Three months ago, he spent $2,000 on a new Wizard-brand camera, with the expectation that it would make his photo shoots go faster and enable him to serve more customers. However, the Wizard camera has proven to be so difficult to use that it is slowing him down and costing him business. Farouk is now trying to decide if he should purchase a Sorceress-brand camera to replace the Wizard camera. In this scenario, what is Farouk’s sunk cost?
a. the business Farouk lost because of his new camera b. the price of the Sorceress camera c. the price of the Wizard camera d. the time it would take Farouk to master the Wizard camera
If the exchange rate measured in euros per dollar increases, then
A) the dollar depreciates relative to the euro. B) the euro appreciates relative to the dollar. C) the euro depreciates relative to the dollar. D) neither currency appreciates or depreciates.
A car dealership estimates that the elasticity of demand for its top models is 0.5. If it raises its prices by 10%,
A. quantity demanded will decrease by 5% and total revenue will increase. B. there will be no change in either quantity demanded or total revenue because demand is inelastic. C. quantity demanded will decrease by 5% and total revenue will decrease. D. quantity demanded will decrease by 10% and total revenue will increase.