"It is possible to restrict imports and still maintain a fixed level of exports." Do you agree or disagree? Why?
What will be an ideal response?
Disagree. If people sell fewer imports to the United States they have less dollars with which to buy United States exports. Since imports ultimately are paid for by exports, a restriction on imports will reduce exports, at least in the long run.
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Refer to the figure above. If a per-unit tax of $1.50 is imposed on the sale of Good X, what is the size of the deadweight loss due to taxation?
A) $5 million B) $7.5 million C) $1.5 million D) $2 million
If a firm with a 20 percent market share merges with a firm with 5 percent of the market, by how much will the Herfindahl index change? The other firms have 40 percent, 15 percent, 10 percent, and 10 percent shares
a. It rises by 100. b. It rises by 200. c. It falls by 100. d. It falls by 200. e. It rises by 25.
The self-interest of the participants in an economy is guided into promoting general economic self-interest by
a. the invisible hand. b. market power. c. government intervention. d. oikonomos.
If aggregate supply is upward sloping, an increase in aggregate demand will result in:
A. An increase in prices and a decrease in output. B. An increase in prices and an increase in output. C. A decrease in prices and a decrease in output. D. A decrease in prices and an increase in output.