According to the graph shown, if the government restricts free trade, area G represents:
This graph demonstrates the domestic demand and supply for a good, as well as a quota and the world price
for that good.
A. quota rents, which go to domestic producers.
B. quota rents, which go to foreign firms or governments.
C. government tax revenues, which go to the domestic government.
D. government tax revenues, which go to the foreign government.
B. quota rents, which go to foreign firms or governments.
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Differentiate between perfectly elastic supply and perfectly inelastic supply. When the price of a good is $100, 50 units are supplied. When the price increases to $300, 250 units are supplied. Calculate the price elasticity of supply of the good
What will be an ideal response?
Refer to Figure 17-4. Which of the following is true at W2?
A) The supply curve is positively sloped. B) The income effect and the substitution effect are equal. C) The substitution effect is larger than the income effect. D) The income effect is larger than the substitution effect.
One reason why critics argue that large firms should not be broken up is that in some cases
A. large firms have a concentration of economic power. B. large firms are less-efficient producers. C. many smaller firms would be less-efficient producers. D. there is no economic reason to break up large firms that may have some control over the market.
Free competitive markets do not process information effectively
Indicate whether the statement is true or false