If tariffs are decreased, the long-run effect is most likely to be
a. a decrease in both U.S. imports and exports.
b. an increase in both U.S. imports and exports.
c. a decrease in U.S. imports and an increase in U.S. exports.
d. an increase in U.S. imports and a decrease in U.S. exports
Answer: b. an increase in both U.S. imports and exports.
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During the Black Plague, capital became worthless. What can explain this?
A) Capital's marginal product fell because there was less labor. B) Capitalists died off at a greater rate than the workers. C) Capital's marginal product increased but the marginal product of labor decreased. D) Workers forgot how to use the capital.
Pineapples and kumquats are substitute goods. Exceptional weather in Guatemala resulted in a bumper crop of pineapples. Ceteris paribus,
A. the price of kumquats will fall and the price of pineapples will increase. B. the price of both pineapples and kumquats will fall. C. the price of both pineapples and kumquats will increase. D. the price of kumquats will increase and the price of pineapples will fall.
A household's reservation wage is the ________
A) lowest wage rate at which the household will supply labor B) wage at which the household's labor supply curve bends backward C) wage rate at which the household's income is largest D) highest wage rate at which the household will supply labor
The Brander-Spencer model identified market failure in certain industries due to
A) unfair competition. B) wildcat destructive competition. C) environmental negative externalities associated with pollution. D) limited competition. E) lack of excess returns.