It is argued that special interest groups are likely to take over and promote protectionist policies, which may lead to a decrease in national economic welfare. This argument leads to
A) a presumption that in practice a free trade policy is likely to be better than alternatives.
B) a presumption that trade policy should be shifted to Non-Governmental Organizations, so as to limit taxpayer burden.
C) a presumption that free trade is generally a second-best policy, to be avoided if feasible alternatives are available.
D) a presumption that free trade is the likely equilibrium solution if the government allows special interest groups to dictate its trade policy.
E) a presumption that protectionist policies will better serve a country as a whole than free trade policies.
A
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The long-run effect of rent control on an area includes
A) rampant building of new low-income housing. B) many new luxury apartments new luxury apartments will be built. C) new investors into the real estate market in the area. D) less investment into the real estate market in the area.
Suppose Winston's annual salary as an accountant is $60,000, and his financial assets generate $4,000 per year in interest. One day, after deciding to be his own boss, he quits his job and uses his financial assets to establish a consulting business, which he runs out of his home. To run the business, he outlays $8,000 in cash to cover all the costs involved with running the business, and earns revenues of $150,000. What are Winston's implicit costs?
A. $64,000 B. $72,000 C. $4,000 D. $60,000
With respect to the consumer price index, which of the following serves as an example of how the substitution bias arises? Between 2010 and 2011, the price of a pound of peanuts
a. rises from $0.80 to $1.00 while the price of a loaf of bread rises from $2.00 to $2.50. b. falls from $0.90 to $0.72 while the price of a loaf of bread falls from $2.00 to $1.60. c. remains constant, as does the price of a loaf of bread. d. None of the above serves as an example of how the substitution bias arises.
Refer to the given figure.
________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________.
A. Rising; A; C B. Falling; A; B C. Falling; A; C D. Rising; B; C