The demand for cars in a certain country is given by: D = 20,000 - P, where P is the price of a car. Supply by domestic car producers is: S = 5,000 + 0.5P. If this economy opens to trade while the world price of a car is $6,000, and the government imposes a quota allowing 3000 cars to be imported, then domestic equilibrium quantity of cars will be ________.
A. 8,000
B. 12,000
C. 6,000
D. 10,000
Answer: B
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Suppose Germany's major companies are retailers and Japan's major companies are manufacturers of cheap goods that are sold by Germany's retailers. Which of the following is likely to arise with respect to trade between Germany and Japan?
a. A trade deficit on Germany's side b. A trade deficit on Japan's side c. A trade balance between the two countries d. A trade surplus in both countries
In economics, another term for satisfaction is
A) scarcity. B) need. C) utility. D) return.
Suppose the U.S. economy enters a recession and incomes fall. What will happen to the equilibrium prices and quantities of normal goods? Would your answer be the same if you were discussing inferior goods? Why or why not?
What will be an ideal response?
Is nominal GDP measured in terms of quantity or in terms of dollars? If dollars, the value of the dollar from what period? Is real GDP measured in terms of quantity or in terms of dollars? If dollars, the value of the dollar from what period?
What will be an ideal response?