What should happen to the equilibrium price and quantity in a market as a result of a quota on imports?
A. Equilibrium price should go down, and equilibrium quantity should go up.
B. Equilibrium price and quantity should both go up.
C. Equilibrium price should go up, and equilibrium quantity should go down.
D. Equilibrium price and quantity should both go down.
Answer: C
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When a nation starts importing a good or service, domestic employment in that industry
A) decreases. B) stays the same. C) increases. D) might change, but more information about what else the country imports is needed to determine if employment increases, decreases, or does not change. E) might change, but more information about what the country exports is needed to determine if employment increases, decreases, or does not change.
If a firm's average total cost is less than price where MR = MC
A) the firm should shut down. B) the firm should cut back on its output to lower its cost. C) the firm should continue to produce the output it is producing. D) the firm should raise its price.
Which of the following is an example of an automatic stabilizer?
a. Congress legislates lower tax rates to increase consumption and investment. b. Tax rates are increased during a recession to maintain a balanced budget. c. A regressive income tax system reduces tax revenues (as a share of income) as income expands. d. Revenues from the corporate income tax increase sharply during a business boom but decline substantially during a recession, even though no new tax legislation has been enacted.
The short-run equilibrium level of real output and the price level are determined by the intersection of the aggregate demand curve and the short-run aggregate supply curve
a. True b. False Indicate whether the statement is true or false