The demand for cars in a certain country is given by: D = 20,000 - P, where P is the price of a car. Supply by domestic car producers is: S = 5,000 + 0.5P. If this economy opens to trade while the world price of a car is $6,000, and the government imposes a quota allowing 3,000 cars to be imported, then domestic equilibrium quantity of cars will be ________.
A. 12,000
B. 8,000
C. 10,000
D. 6,000
Answer: A
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The ways to address agency costs include
a. gathering information about the agent's characteristics before hiring b. gathering information about the agent's actions once hired c. incentivizing agents to work on behalf of principals d. all of the above
One reason regulators push for higher prices in an industry is to
a. prevent excess profits in the industry. b. protect the public from excessively low prices. c. encourage usage of the good or service. d. protect against the demise of existing firms.
Consider an unregulated monopoly in Figure 8.13. Suppose that a second firm enters the market and both firms in the industry are profitable. After the second firm's entry, the industry is now classified as:
A. a natural monopoly. B. a duopoly. C. a monopolistic competitor. D. a pure competitor.
Even if GDP included these types of production, why would it still be an imperfect measure of economic well-being?
A. GDP is not adjusted for crime or other social problems B. The value of leisure is not included in GDP C. GDP is not adjusted for pollution and it does not account for unequal income distribution D. All of the above E. A and C only