Under free trade, a large country produces one million leather bags per year and imports another two million bags per year at the world price of $60 per bag. Assume the country imposes a specific tariff of $5 per bag. As a result, the per-unit price of leather bags decreases to $58 in the international market and the import of leather bags drops to 1.6 million. The domestic production, on the other hand, increases to 1.1 million. Following the imposition of the tariff, the domestic consumers pay a price of ________ for each bag.
A. $65
B. $63
C. $60
D. $58
Answer: B
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Assume that Sharon purchases $5,000 worth of a stock. To do so she uses $1,000 of her own money and borrows the remaining $4,000 at a 7.0% interest rate. If the stock's value decreases by 10% in one year and she has to sell the stock at that time, what is her rate of return?
a. ?10% b. ?50% c. ?78% d. ?156%
The short-run aggregate supply curve has a
A) negative slope. B) positive slope. C) slope equal to infinity. D) slope equal to zero.
Answer the following statements true (T) or false (F)
1. To maximize profits, a competitive firm will maximize the difference between MRP and the wage rate for the laborers it hires. 2. To achieve profit maximization, a firm must produce the profit-maximizing output with the least amount of economic resources. 3. If a firm pays labor $5 and receives a MPL of 10, while paying capital $100 and receiving a MPC of 100, to lower production costs it should hire more labor and less capital. 4. If MPx > MPy, a firm should hire more x and less y.
Which of the following is an example of trade policy at the regional level?
a. Congress passing legislation to prevent dumping. b. The European Union adopting a common currency c. The World Trade Organization holding a round of negotiations in France. d. The General Agreement on Tariffs and Trade being made.