A country with a trade surplus is:
A. consuming up to the level of potential production.
B. consuming more than it produces.
C. producing more than it consumes.
D. producing up to the level of desired consumption.
Answer: C
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If Indonesia imposes an import tariff on Hollywood movies, the tariff ________ the price of seeing a movie in Indonesia, the production of movies in Indonesia ________, and imports of Hollywood movies into Indonesia ________
A) raises; increases; increases B) raises; increases; falls C) lowers; increases; falls D) lowers; decreases; falls E) raises; decreases, falls
Which formula is correct?
A. Yd + S = C B. Yd × S = C C. Yd = S + C D. Yd + C = S
A monopolist
A. faces a demand curve that is more elastic than the demand curve for the industry. B. is constrained in its pricing decisions by the demand curve it faces. C. can charge whatever price it wants because it is the only firm producing the good. D. can usually keep price equal to marginal revenue by lowering the price on the last unit sold only.
Suppose that Paraguay and Guyana are both engaged in the production of soybeans and grapefruit, and that Paraguay has an absolute advantage in the production of both goods. If Guyana has a comparative advantage in the production of soybeans, then Guyana
A. should continue to produce soybeans, but only for domestic consumption, because trade is not a viable option. B. has a lower opportunity cost for producing soybeans, but specialization is not feasible because Paraguay has a lower monetary cost of soybean production. C. has a lower opportunity cost for soybeans, which means that it should specialize in production of soybeans and engage in trade. D. has a higher opportunity cost for soybeans, which means it should specialize in the production of grapefruit and engage in trade.