When the price of a good changes, the substitution effect can be found by comparing the equilibrium quantities purchased
A) on the old budget line and the new budget line.
B) on the original indifference curve when faced with the original prices and when faced with the new prices.
C) on the new budget line and a hypothetical budget line that is a shift back to the original indifference curve parallel to the new budget line.
D) on the new indifference curve.
B
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Which of the following can reduce the number of cars imported?
A) a tariff B) a quota C) a ban D) All of the above.
One of the main purposes of the 1947 General Agreement on Tariffs and Trade was to
a. repudiate the most-favored-nation principle. b. encourage bilateral trade agreements between nations. c. promote free trade among nations. d. replace the use of import quotas with tariffs.
When a firm is on the flat portion of its long-run ATC curve,
A. changing its firm size will not affect its total cost per unit. B. it is capturing the lowest average total costs possible in the industry. C. it is experiencing constant returns to scale. D. All of these are possibly true.
Would the Keynesian consumption function work well in a world of libertarian paternalists?
What will be an ideal response?