If country A is importing good x from country B where x is produced along a perfectly inelastic supply curve, then country B will suffer the entire deadweight loss from any tariff imposed on imports to country A.
Answer the following statement true (T) or false (F)
False
Rationale: In order for this to be true, country A would have to be passing the entire burden of the tariff to B. But as long as demand in B is downward sloping, price will fall in both A and B --- implying the burden of the tax (and its accompanying deadweight loss) is borne in both countries.
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The two parts that make up an option's price are:
A. the commission and the time value of the option. B. extrinsic value and the time value of the option. C. the price of the underlying asset and the time value of the option. D. the intrinsic value and the time value of the option.
One way to explain the convexity of isoquants is to say that
A) as labor increases and capital decreases, MPL rises while MPK falls. B) as labor increases and capital decreases, MPL falls while MPK rises. C) as labor increases and capital decreases, MPL and MPK both fall. D) as labor increases and capital decreases, MPL and MPK both rise.
If consumers suddenly have a greater desire for energy drinks, the price of energy drinks will likely ________ and producers will ________ production
A) increase; decrease B) increase; increase C) decrease; decrease D) decrease; increase
If a firm raised its price and discovered that its total revenue fell, then the demand for its product is
A) relatively elastic. B) perfectly inelastic. C) perfectly elastic. D) relatively inelastic.