Employing a general equilibrium approach, describe the effect of a new law that prohibits steel imports
What will be an ideal response?
The initial effect is that the supply curve for steel shifts leftward. This raises the price of steel. The largest users of steel are the automobile industry, the construction industry, and the appliance industry. The increased cost of inputs will raise the price of the goods produced by these industries. Given time, these industries will look to substitute plastic or aluminum in place of steel, raising the prices of these materials.
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The three major sources of economic profit are
A. risk-bearing, innovation, and exercise of monopoly power. B. risk-bearing, rent seeking, and discounting. C. innovation, invention, and speculation. D. exercise of market power, marginalization, and speculation.
What is meant by the term technological spillover?
What will be an ideal response?
The foundational principle that makes insurance companies work is called:
A. risk pooling. B. risk assignment. C. catastrophic causation. D. risk analysis.
The value of the marginal product of labor equals the marginal product of labor times the:
A. nominal wage. B. price of output. C. quantity of labor. D. real wage.