Explain the difference between a tariff and a quota. What impact do tariffs and quotas have on the prices of domestic and imported goods?
What will be an ideal response?
A tariff is a tax imposed by government on imported goods. A quota is a limit on the number of imported goods allowed into a country. Tariffs and quotas raise prices for both domestic and imported goods.
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Firms in a small economy anticipated that inventories would grow over the past year by $500,000. Over that year, inventories actually grew by only $400,000. This implies that
A) there was a planned increase in inventories that year. B) aggregate expenditure that year was greater than GDP that year. C) aggregate expenditure that year was equal to GDP that year. D) there was an unplanned increase in inventories that year.
Which of the following statements concerning the distinction between positive and normative economics is TRUE?
A) Positive statements are concerned with what is, while normative statements are concerned with what someone thinks should be. B) Positive statements are concerned with what people think, while normative statements are concerned with what people do. C) Positive statements are true while normative statements are false. D) Positive statements are concerned with what is while normative statements are concerned with what will be.
The requirement of a "double coincidence of wants" is the chief __________ of the __________ exchange system
A) advantage; barter B) advantage; monetary C) disadvantage; barter D) disadvantage; monetary
The study of microeconomic theory focuses on
A. individual behavior in the economy B. Operation of the entire economy. C. Interaction of international trade and domestic production of goods and services. D. Role of the banking system in the economy.