Refer to Figure 7-2. With the tariff in place, the United States
A) imports 12 million pounds of coffee. B) imports 18 million pounds of coffee.
C) exports 38 million pounds of coffee. D) imports 20 million pounds of coffee.
D
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Suppose the production function for T-shirts can be represented as q = L0.25K0.75. Show that the isoquants for this function are convex
What will be an ideal response?
Consider a market that is in equilibrium. If it experiences both a decrease in demand and a decrease in supply, what can be said of the new equilibrium? The equilibrium:
A. price and quantity will both fall. B. quantity will definitely fall, while the equilibrium price cannot be predicted. C. price will definitely fall, while the equilibrium quantity cannot be predicted. D. price and quantity will both rise.
If a nation's production possibilities curve is a straight line
a. the law of increasing costs does not apply b. the law of increasing costs applies c. there are no gains from trading with other nations d. the gains from trading with other nations are captured by the other nations e. the gains from trading with other nations are captured by the nation
If the nominal deficit is $200 billion, the real deficit is $150 billion, and total debt is $2 trillion, then inflation is:
A. 5 percent. B. 2.5 percent. C. 1 percent. D. 4 percent.