The figure below shows the market for shoes in a small importing country. Dd and Sd are the domestic demand and supply curves of shoes, respectively.
Following the imposition of a tariff, the domestic consumer surplus ________ by the area
A. decreases; d.
B. increases; (b + d).
C. decreases; (a + b + c +d).
D. increases; (D0 - D1).
Answer: C
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Carefully explain if the following statements are true, false, or uncertain
a. If average cost is increasing, marginal cost must be increasing. b. If there are diminishing returns, the marginal cost curve must be positively sloped. c. Marginal costs decrease as output increases because the firm can spread fixed costs over more units.
Assuming a reserve ratio of 10 percent, if a bank sells $100,000 in securities how much can the bank loan out?
A) $90,000 B) $100,000 C) $110,000 D) $10,000
A monopoly will be maximizing profits if it is operating at the point where:
a. price is at a maximum. b. average cost is at a minimum. c. average cost is at a maximum. d. marginal cost is at a minimum. e. marginal revenue = marginal cost.
The law of demand ensures that a demand curve has a positive slope
a. True b. False Indicate whether the statement is true or false