Distinguish between a voluntary export restraint and a quota
What will be an ideal response?
A voluntary export restraint is an agreement negotiated between two countries that places a numerical limit on the quantity of a good that can be imported by one country from the other country. A quota is a numerical limit imposed by the government on the quantity of a good that can be imported into a country.
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GDP understates the value of output produced by an economy because it
A) includes environmental degradation caused by increased output production. B) includes transactions that do not take place in organized markets, such as home-cooked meals. C) excludes value added from the underground economy, such as tips taken "under the table." D) excludes the value of the wages and benefits of government employees.
Which of the following holds true at the chosen level of output in the long run for firms in a perfectly competitive market?
A. MR = AVC B. P = minimum AVC C. P = MC D. MR > ATC
Answer the following questions true (T) or false (F)
1. Black markets only exist in developing nations. 2. Rent control is an example of a price ceiling. 3. Price ceilings are illegal in the United States.
Which statement concerning the kinked demand curve model of oligopoly is false?
A. It addresses the question of price "stickiness." B. It assumes when one oligopoly raises the price, all others will follow. C. The portion of the demand curve above the "kink" is more elastic than the portion below. D. The firm's marginal costs can sometimes shift without changing the profit-maximizing price and output.