An import tariff will have what effect on price and quanititly in the domestic market for the good?
a. increase; increase
b increase; decrease
c. decrease; increase
d. decrease; decrease
e. decrease; no change
Ans: b increase; decrease
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Refer to the following graphs.
Which graph depicts a perfectly competitive firm in long-run equilibrium?
A. Graph I B. Graph II C. Graph III D. Graph IV
If marginal cost is increasing, then average total cost must be increasing simultaneously.
Answer the following statement true (T) or false (F)
If a firm is able to convert every dollar of consumer surplus to economic profit, the firm has achieved
A) discrimination among units of a good. B) discrimination between groups of buyers. C) perfect price discrimination. D) perfect cost minimization. E) the normal amount of economic profit.
U.S. manufacturers formed trusts in the late 1880s because
a. booms in the economy made trusts highly profitable and allowed them to expand b. economies of scale allowed larger firms to prosper c. the rapid growth of the railroads allowed firms to reach a wider market d. technological breakthroughs increased capital use and optimal firm size e. they wanted to avoid price wars during depressions