If the demand curve is downward sloping and linear (a straight line), a tariff imposed on a foreign monopoly seller will raise the domestic price by _______________ and lower the seller's net by _______________ of the tariff.
a. one-fourth; three-fourths
b. 10%; 90%
c. one-half; one-half
d. 100%; 0%
Ans: c. one-half; one-half
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At a price for which quantity demanded exceeds quantity supplied, a __________ is experienced, which pushes the price __________ toward its equilibrium value
A) surplus; downward B) surplus; upward C) shortage; downward D) shortage; upward
Producer surplus is equal to the area
A) under the demand curve and above the supply curve. B) above the supply curve and below the price line. C) under the supply curve. D) under the demand curve and above the price line.
If two nations have straight-line production possibilities curves:
A. then their trading possibilities curves must lie inside the production possibilities curves. B. there will be no basis for mutually advantageous trade. C. there will be a basis for mutually advantageous trade whether the slopes are equal or not. D. there will be a basis for mutually advantageous trade provided the slopes differ.
________ coordinate economic activity in which there are substantial ________
A) Markets; team production efficiencies B) Markets; transactions costs C) Firms; economies of scale D) Firms; principal-agent problems