The gravity equation was tested and found to be very accurate in predicting:
a. world trade in total.
b. trade between various provinces in Canada and American states.
c. trade between the United States and Japan.
d. trade between nations in the European Union.
Ans: b. trade between various provinces in Canada and American states.
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In the figure above, international trade ________ producer surplus in the United States by ________
A) decreases; $2.88 billion B) decreases; $1.92 billion C) increases; $4.8 billion D) increases; $3.6 billion
Explain the difference between increasing marginal returns and economies of scale
What will be an ideal response?
Refer to Figure 15-8. Use the figure above to answer the following questions
a. Identify the curves labeled A and B. Identify the curve which contains both point Y and point Z. Identify the curve which contains both point V and point W. b. What is the profit-maximizing quantity and what price will the monopolist charge? c. What area represents total revenue at the profit-maximizing output level? d. What area represents total cost at the profit-maximizing output level? e. What area represents profit? f. What is the profit per unit (average profit) at the profit-maximizing output level? g. If this industry was organized as a perfectly competitive industry, what would be the profit-maximizing price and quantity? h. What area represents the deadweight loss as a result of a monopoly?
Vertical contracts between manufacturers and retailers often aim to
a. Incentivize the retailers to undertake costly activities, which they otherwise may not realize the full benefits of on their own b. Reward the retailer for undertaking the risk inherent in introducing a new product c. Serve as a "signal" of the manufacturer's belief of the likely success of his product d. All of the above