A tariff on a good increases the domestic price of the good, increases domestic production of the good, reduces the amount of the good sold, and decreases imports of the good
a. True
b. False
Indicate whether the statement is true or false
True
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Tele-Com, Inc., the nation’s largest cable TV company, tested the effect of a price reduction for the Disney Channel. It lowered prices from $10.75 to $7.95 and found that the number of customers more than doubled. This means the
A. demand curve for the Disney Channel shifted to the right. B. supply curve of the Disney Channel shifted to the left. C. demand for the Disney Channel is elastic in this price range. D. demand for the Disney Channel is inelastic in this price range.
An economy may be operating at a point inside the production possibilities curve if: a. technological progress enables the economy to produce quantities of output otherwise unattainable. b. a substantial amount of labor is unemployed
c. a substantial amount of machinery is idle. d. either b. or c. occur.
In equilibrium which of the following happens if the U.S. imposes tariffs on power tools?
a. U.S. net exports rise b. the exchange rate falls c. U.S. production of power tools rises d. All of the above are correct.
The greater are the barriers to entry into an industry
A. the more elastic will be the demand curves for existing firms. B. the more likely that existing firms will enjoy large profits in the long run. C. the lower will be short-run profits. D. the lower will be the average cost curves of existing firms.