Which of the following statements best describes the belief among economists about trade?
a. The common belief among economists is that it is better to embrace the gains from trade, and then deal with the costs and trade-offs with other policy tools than it is to cut off trade to avoid the costs and trade-offs.
b. The common belief among economists is that it is better to cut off trade to avoid the costs and trade-offs than it is to embrace the gains from trade and then deal with the costs and trade-offs with other policy tools.
c. The common belief among economists is that it is better to deal with the costs and trade-offs of trade with other policy tools before embracing the gains from trade, than it is to cut off trade to avoid the costs and trade-offs.
d. The common belief among economists is that it is better to cut off trade to avoid the costs and trade-offs, deal with the costs and trade-offs with other policy tools, and then embrace the gains from trade.
b. The common belief among economists is that it is better to cut off trade to avoid the costs and trade-offs than it is to embrace the gains from trade and then deal with the costs and trade-offs with other policy tools.
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Refer to Figure 1A.1. If the hours worked per week are 20, the income per week is
A) 50. B) 100. C) 150. D) 200.
The structural surplus
A) is legally required to be positive. B) fluctuates over the business cycle. C) is, by definition, equal to the negative of the cyclical deficit. D) equals the actual surplus plus the cyclical surplus. E) is the government budget surplus that would exist if the economy was at full employment.
Suppose a price floor on sparkling wine is proposed by the Health Minister of the country of Vinyardia. What will be the likely effect on the market for sparkling wine in Vinyardia?
A) Quantity demanded will decrease, quantity supplied will increase, and a surplus will result. B) Quantity demanded will increase, quantity supplied will decrease, and a shortage will result. C) Quantity demanded will increase, quantity supplied will decrease, and a surplus will result. D) Quantity demanded will decrease, quantity supplied will increase, and a shortage will result.
Which of the following is characteristic of oligopoly firms, but not of monopolistically competitive firms?
a. firms seek to maximize profits b. firms face downward-sloping demand curves c. the pricing behavior of one firm has a significant effect on the sales of other firms d. firms have at least some ability to influence price