Tariffs and quotas are used to promote trade with foreign countries
Indicate whether the statement is true or false
False
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Due to inflation, nominal prices are usually
A) equal to real prices. B) smaller than real prices. C) larger than real prices. D) a constant proportion different from real prices.
Using Figure 2 below, suppose that the economy started at PAE2. A potential change that could cause the economy to go from PAE2 to PAE1 might be:
A. wealth level increases.
B. interest rates increase.
C. taxes decrease.
D. domestic income decreases.
Which of the following statements accurately explains the superstar phenomenon in wages?
a. Better carpenters earn more than average carpenters because people are willing to pay higher prices for higher-quality work. b. The more productive an author is, the more books she can write each year, so the more she earns. c. Talented movie stars earn more than equally talented mechanics because technology allows the delivery of the services provided by the movie stars to all interested customers. d. Athletes get paid for performing services that everyday people perform as hobbies.
A firm has $200 million in total revenue and explicit costs of $190 million. Suppose its owners have invested $100 million in the company at an opportunity cost of 10 percent interest rate per year. The firm's economic profit is:
A. $400 million. B. $100 million. C. $80 million. D. zero.