A small country imports T-shirts. With free trade at a world price of $10, domestic production is 10 million T-shirts and domestic consumption is 42 million T-shirts. The country's government now decides to impose a quota to limit T-shirt imports to 20 million per year. With the import quota in place, the domestic price rises to $12 per T-shirt and domestic production rises to 15 million T-shirts per year. If the government auctions the import licenses, the national well-being will ________ by
A. decrease; $12 million.
B. decrease; $5 million.
C. increase; $65 million.
D. increase; $40 million.
Answer: A
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When the "real" GDP falls, the rate of unemployment generally
A) equals the natural rate. B) decreases. C) increases. D) stays constant.
One of the functions of money is to serve as a:
A. store of value. B. valuation tool. C. equality enhancer. D. sole way to make payments.
In the short-run macro model, an open-market purchase of bonds by the Fed will
a. raise the interest rate, reduce spending, and increase output b. raise the interest rate, reduce spending, and decrease output c. lower the interest rate, reduce spending, and decrease output d. lower the interest rate, increase spending, and decrease output e. lower the interest rate, increase spending, and increase output
Vito attends college and works part-time job as a waiter. He can work up to 40 hours each week at his job, which pays $8 per hour. The table below shows his utility from different levels of leisure and income. Vito is currently working 20 hours per week. If Vito decides to work 30 hours instead, what will be his marginal utility loss from having less leisure?
a. 34
b. 24
c. 10
d. 18