Which of the following is true?
A. An import quota generates government revenue.
B. Tariffs on imports never generate government revenue.
C. Tariffs on imports generate government revenue as long as the domestic price is larger than the world price plus the tariff.
D. Tariffs on imports do not generate government revenue if the domestic price is larger than the world price plus the tariff.
Answer: C
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Supporters of minimum-wage legislation argue that:
A. a worker earning minimum wage should be able to live above the poverty line. B. it would not be fair for firms to pay a wage that would leave workers struggling to escape poverty. C. workers deserve a basic standard of living. D. All of these are true.
In making a production decision, an entrepreneur
A. Decides what level of output will maximize profits. B. Determines plants and equipment. C. Decides whether to enter or exit the market. D. Can change both fixed and variable inputs.
Health insurance markets have a problem with insuring people who are "poor health risks" while many people who are "good health risks" do not buy insurance. This problem is an example of
A) moral hazard. B) adverse selection. C) market signaling. D) asymmetric information.
Refer to Scenario 13.2 below to answer the question(s) that follow. SCENARIO 13.2: The government of Stratospheria is currently inviting investors to bid for the exclusive right to provide cable television service to its residents. The market demand for this service is P=55-0.01Q, where Q is the number of households that would subscribe to the cable service and P is the monthly fee charged to the subscribers. The associated marginal revenue curve is MR=55-0.02Q. Fun Cable Company is interested in bidding for the right to provide cable service in Stratospheria. It has a constant average and marginal cost of $5 for providing cable service to each household.Refer to Scenario 13.2. At what level of output (number of households) is Fun Cable Company's total revenue maximized?
A. 2,500 B. 2,750 C. 5,000 D. Indeterminate from the given information.