In the case of a small country, the effects of a quota and a tariff are (almost) identical if
A. the government allocates import licenses directly to the public using a free lottery system.
B. the government allocates licenses for free to importers using a rule or process that involves (almost) no resource cost.
C. the government allocates licenses to importers through application and selection procedures that require the use of substantial resources.
D. the government auctions off import licenses to the highest bidder.
Answer: D
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Bridge Coal Company is the only employer in a remote and mountainous region of the country, so the firm is the monopsony buyer of labor in the market. If the price of coal increases, then the firm's:
A) ME curve shifts leftward. B) AE curve shifts rightward. C) ME and AE curves shift rightward. D) MV curve shifts rightward.
Suppose the price of gasoline rises and consumers cut back on their use of gasoline relative to other consumer goods. This situation would contribute to which bias in the consumer price index?
a. Substitution bias. b. Transportation bias. c. Quality bias. d. Indexing bias.
If loans are $300,000 . checkable deposits are $600,000 . and the required reserve ratio is 40 percent, then excess reserves are:
a. $360,000. b. $240,000. c. $120,000. d. $60,000. e. $30,000.
Which of the following most clearly illustrates the law of diminishing marginal utility?
a. The total satisfaction from consuming a good falls as more of the good is consumed. b. Marginal utility falls as total utility falls. c. The quantity of a good demanded falls as its price rises. d. The additional satisfaction from consuming a good falls as more of the good is consumed. e. There is a direct relationship between the price of a good and its total utility.