The figure below shows the market for computers in a small importing country. Dd and Sd are the domestic demand and supply curves of computers, respectively.
The production effect of the tariff on computers is worth
A. $48 million.
B. $44 million.
C. $4 million.
D. $8 million.
Answer: C
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Employing the data from Figure 2-2, income Y is equal to
A) $3,000,000. B) $3,300,000. C) $3,600,000. D) $5,100,000.
Explain why policy lags could make stabilization policies counterproductive
If we observe a decrease in the price of a good and an increase in the amount of the good bought and sold, this could be explained by
a. an increase in the supply of the good.
b. an increase in the demand for the good.
c. a decrease in the demand for the good.
d. a decrease in the supply of the good.
Economists fear deflation because:
A. falling revenue increases the likelihood that workers will be laid off. B. falling prices make firms more susceptible to bankruptcy. C. consumers anticipating further price declines will delay purchases. D. of all these reasons.