Import tariffs in the United States are likely to reduce U.S. exports, both because of the resulting decrease in foreign earnings of dollars from exports to the United States and because of the likelihood of increases in other countries' import restrictions against U.S. goods
a. True
b. False
Indicate whether the statement is true or false
True
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A firm will expand the amount of output it produces as long as its
A) average total revenue exceeds its average total cost. B) average total revenue exceeds its average variable cost. C) marginal cost exceeds its marginal revenue. D) marginal revenue exceeds its marginal cost.
In the short run, a monopolist:
a. always earns an economic profit. b. never earns an economic profit. c. never earns an accounting profit. d. None of the above are correct.
Suppose there are only two goods in the world, corn and shirts. If it is true that with its vast resources the United States could produce both more corn and more shirts than Mexico,
a. Mexico will never have a comparative advantage and, thus, can never gain from trading with the United States. b. trade between the United States and Mexico will make the United States better off but will leave Mexico worse off unless the wage of workers in Mexico rises to equal that of American workers. c. total production of corn and shirts cannot be increased through specialization and trade. d. both countries will be able to gain from specialization and trade as long as relative costs of producing the two goods are different in Mexico than in the United States.
Refer to the graph shown. Suppose the market price is $4. At this price, a perfectly competitive firm should:
A. shut down in the short run but continue production in the long run. B. continue to produce in the short run but shut down in the long run. C. continue to produce in both the short run and the long run. D. shut down immediately.