Europe had refused to import genetically modified food products. The WTO ruled that:
a. if Europe was afraid of these products, it could put an import ban on them.
b. Europe needed to base its ban on scientific evidence rather than because of fear about something unproven.
c. Europe could declare a moratorium until an investigation could be undertaken.
d. the products could be treated and then they would be safe.
Ans: b. Europe needed to base its ban on scientific evidence rather than because of fear about something unproven.
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In the diagrams below, the subscript "1" refers to the initial position of the curve, while the subscript "2" refers to the final position after the curve shifts.
In which of the diagrams above would we see a shortage at the initial price after the indicated curve has shifted?
A. (1) and (4) B. (2) and (3) C. (1) and (3) D. (2) and (4)
Suppose Larry's Lariats produces lassos, and uses nine feet of rope to make each lasso. The rope is put into a machine that automatically cuts it to the right length, then seals the ends to prevent fraying. The rope is then hand tied, dipped, and wound before being placed in a packaging machine to prepare it for retail sale. The total costs for this company would include:
A. employee's wages. B. the rope-cutting machine. C. the cost of rope. D. All of these expenses would be included in total cost.
A steel factory has the right to discharge waste into a river. The waste reduces the number of fish, causing damage for fisheries. Let X denotes the quantity of waste dumped. The marginal damage, denoted MD, is given by the equation MD = 2 + 5Q. The marginal benefit (MB) of dumping waste is given by the equation MB = 34 - 3Q.
(a) Calculate the efficient quantity of waste. (b) What is the efficient fee, in dollars per unit of waste, which would cause the firm to dump only an efficient quantity of waste? (c) What would be the quantity dumped if the firm did not care about the fishery?
Suppose the actual and expected price levels in an economy are initially equal. However, the actual price level falls eventually due to a change in economic conditions. Which of the following will occur in the long run?
What will be an ideal response?