What are the effects of a tariff, and who benefits and who loses when tariffs are imposed? What are the effects of a quota, and who benefits and who loses when quotas are imposed?
A tariff raises the domestic price of the good the tariff is placed on. The higher price benefits domestic producers, and the tariff revenue benefits the government, both at the expense of domestic consumers. A quota raises the domestic price of the good with the quota imposed on it. The higher price benefits domestic producers and the foreign producers who are allowed to sell the good, both at the expense of the domestic consumer.
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The problem of "double marginalization" is
a. The retail price being too high due to an inclusion of both manufacturer and retailer markup b. The retail price being too low due to an exclusion of both manufacturer and retailer markup c. The retail price being too high due to an exclusion of manufacturer markup d. The retail price being too low due to an exclusion of retailer markup
Which of the following is true?
A. A functional form misspecification can occur if the level of a variable is used when the logarithm is more appropriate. B. A functional form misspecification occurs only if a key variable is uncorrelated with the error term. C. A functional form misspecification does not lead to biasedness in the ordinary least squares estimators. D. A functional form misspecification does not lead to inconsistency in the ordinary least squares estimators.
What is an example of the substitution effect?
A. The firm expands output when production costs fall. B. The firm hires more labor when the wage falls because labor has become relatively cheaper compared to the price of other factors of production. C. Workers choose to provide more hours of labor when the wage rate decreases. D. More labor is hired as long as the marginal product of labor is positive. E. The firm expands output when production costs increase.
In the United States, "farm products" are generally produced in more ___________ markets, while "food products" tend to be sold in markets that are more ____________
A. monopolistic; competitive B. competitive; oligopolistic C. oligopolistic; competitive D. oligopolistic; monopolistic