Suppose the United States eliminates high tariffs on German bicycles. As a result, we would expect
A. the price of German bicycles to increase in the United States.
B. employment to decrease in the U.S. bicycle industry.
C. employment to decrease in the German bicycle industry.
D. profits to rise in the U.S. bicycle industry.
Answer: B
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If the world price of a good is below the no-trade domestic price, a country
A) will benefit from exporting the good. B) will benefit from importing the good. C) cannot benefit from trade. D) has a comparative advantage in the production of that good. E) will not engage in trade for that good.
People consume more fresh fruit in the summer than during the rest of the year, yet the prices of fresh fruit are lower in the summer than in other seasons. What accounts for this?
A) Fresh fruit is not subject to the law of supply. B) The supply of fresh fruit increases in the summer. C) Fresh fruit is an inferior good. D) Fresh fruit is not subject to the law of demand.
What is the difference between a "free" good and a "scarce" good?
What will be an ideal response?
What do you feel would be the effect of a mandate that requires all people to purchase health insurance?
What will be an ideal response?