A tariff will typically
A. reduce the price, net of the tariff, that is received by sellers and increase the price paid by consumers.
B. increase the price paid by consumers.
C. reduce the price, net of the tariff, that is received by sellers.
D. increase the price, net of the tariff, that is received by sellers.
Answer: A
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The law of supply reflects the fact that
A) people buy more of a good when its price falls. B) suppliers have an incentive to use their resources in the way that brings the biggest return. C) the demand curve is downward sloping. D) higher prices are more attractive to consumers because they signal a higher quality product. E) businesses can sell more goods at lower prices.
A professional basketball players' union negotiates a contract that dramatically increases all players' salaries. How would this influence the opportunity cost for a player who was considering giving up basketball to pursue a career in broadcasting?
a. It would not affect the opportunity cost of playing basketball or of broadcasting. b. It would increase the opportunity cost of continuing to play professional basketball. c. It would cause the production possibilities frontier to become convex. d. It would increase the opportunity cost of becoming a broadcaster. e. It should have no bearing on the player's decision from an economic standpoint.
According to the Fisher effect, if the central bank raises the rate of money supply growth, what happens to the nominal and the real interest rate?
The federal government increases spending by $50 billion, and the main effect is an increase in the price level. It must be true that the economy is operating on the
A. horizontal portion of the aggregate demand curve. B. horizontal portion of the aggregate supply curve. C. vertical portion of the aggregate supply curve. D. vertical portion of the aggregate demand curve.