Besides tariffs and import quotas, another way of curtailing imports is by ______.
a. imposing taxes on foreign products
b. reducing limits on foreign goods
c. removing taxes on sales of imports
d. strengthening product standards
d. strengthening product standards
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Suppose the current price of a pound of steak is $6 per pound and the equilibrium price is $9 per pound. What takes place?
A) There is a shortage, so the price rises and quantity demanded increases. B) There is a shortage, so the price falls and quantity demanded increases. C) There is a surplus, so the price falls and quantity demanded increases. D) There is a shortage, so the price falls and quantity demanded decreases. E) There is a shortage, so the price rises and quantity demanded decreases.
The above figure shows the payoff matrix facing an incumbent firm and a potential entrant. Assuming a fixed cost of entry, the outcome will be that the incumbent
A) deters entry. B) chooses the Stackelberg leader level of output but the potential entrant does not enter anyway. C) chooses the Stackelberg leader level of output and the potential entrant enters. D) deters entry and earns zero profit.
False advertising ________ likely to be successful with newly built vacation rental homes on a remote island because the rental homes are a(n) ________ good.
A) is; credence B) is not; experience C) is; experience D) is not; credence
Assume the short-run average total cost for a perfectly competitive industry increases as the output of the industry expands. In the long run, the industry supply curve will:
a. have a positive slope. b. have a negative slope. c. be perfectly horizontal. d. be perfectly vertical.