A perfectly competitive industry's market or "going" price is established by
A. the largest purchaser of this industry's output.
B. the forces of supply and demand.
C. the largest firm in the industry.
D. each individual producing firm and reflects that firm's costs.
Answer: B
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Suppose a government is considering imposing either a tariff or a quota on imported grain, and either policy will result in exactly 750 tons of grain being imported. How do these policies differ?
A. The price of grain under the quota will be higher than the price under the tariff. B. The price of grain under the tariff will be higher than the price under the quota. C. Domestic production will be higher with the quota than with the tariff. D. The quota will generate revenue for the firms that hold import licenses, while the tariff will generate revenue for the government.
The extra cost associated with undertaking an activity is called
A) opportunity cost. B) foregone cost. C) marginal cost. D) net loss.
Countercyclical fiscal policy can
a. only be employed in reaction to an existing recession b. only be employed in reaction to an existing boom c. be employed to prevent a potential recession or boom or in reaction to an existing recession or boom d. only be employed to prevent a potential boom e. only be employed to prevent a potential recession
Gross domestic product (GDP) can be calculated using either the expenditure method or the income method.
Answer the following statement true (T) or false (F)