What will happen to profits and domestic prices when a quota is used to protect a domestic monopolist from international competition?
a. Profits will fall; domestic prices will fall.
b. Profits will fall; domestic prices will rise.
c. Profits will rise; domestic prices will rise.
d. Profits will rise; domestic prices will fall.
Answer: c. Profits will rise; domestic prices will rise.
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The total labor hours that all the firms in the economy plan to hire during a given time period at one particular real wage rate is the
A) demand for labor. B) supply of labor. C) quantity of labor demanded. D) quantity of jobs supplied. E) quantity of labor supplied.
Describe the transition from short-run to long-run equilibrium in a monopolistically competitive industry
What will be an ideal response?
Refer to Scenario 10.3. Compared to a competitive red herring industry, the monopolistic red herring industry
A) produces more output at a higher price. B) produces less output at a higher price. C) produces more output at a lower price. D) produces less output at a lower price. E) not enough information to relate the monopolistic red herring industry to a competitive industry.
How does the federal government provide public goods and reduce the number of free riders?
a. Requiring tax payments b. Acquiring private firms c. Investing in education d. Protecting patents