Which of the following is likely to happen if the government imposes a tariff?
A) Domestic producers will be worse off.
B) Domestic producers will face higher foreign competition.
C) Domestic producers will face fewer foreign competitors.
D) Domestic consumers will be better off.
C
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Dan is the owner of a price-taking company that manufactures sporting goods. One particular facility Dan owns produces baseball bats and baseball gloves. His cost function for baseball bats is CB(QB, QG) = 100QB + QB2 + QBQG and the marginal cost is MCB = 100 + 2QB + QG, where QB is the output level for bats and QG is the output level for gloves. Dan's cost function for baseball gloves is CG(QB, QG) = 50QG + QG2 + QGQB, and the marginal cost is MCG = 50 + 2QG + QB. The price of a baseball bat is $240 and the price of a baseball glove is $150. How would the profit-maximizing sales quantities for bats and gloves change if the price of bats was $270?
A. The quantities of bats and gloves will remain unchanged. B. The quantity of gloves will increase while the quantity of bats will decrease. C. The quantity of bats will increase while the quantity of gloves will decrease. D. The quantities of bats and gloves will both increase.
Which of the following statements is true concerning income inequality?
A. Developed countries have greater income inequality than developing countries. B. The free market produces an unequal distribution of income. C. The government has no way to alter income inequality. D. Income is equally distributed in poor countries.
Keynesians:
A. accept the countercyclical policy of doing nothing, that is, allowing market forces to work. B. believe that the level of aggregate demand in the 1930s was sufficient to generate full employment. C. accept the fact that policymakers should eliminate inflation first before focusing on unemployment. D. focus on increasing aggregate demand in order to stimulate the economy.
The law of diminishing marginal returns
A) sets in because not all workers are equally productive. B) applies only in the short run. C) holds even when there are no fixed factors. D) ultimately explains why production displays diseconomies of scale.