Tariffs and import quotas both decrease the amount of a good consumed and raise the price paid by domestic residents for the good
Indicate whether the statement is true or false
TRUE
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When a regulator allows a monopolist to set its price equal to long-run average cost, the regulator is practicing
A) marginal cost pricing. B) operating cost pricing. C) average cost pricing. D) optimal cost pricing.
A person has a comparative advantage in the production of a good when they can produce the product at a(n) ________ opportunity cost compared to another person
Fill in the blank(s) with the appropriate word(s).
Answer the following statements true (T) or false (F)
1. Economists widely fear that the world will run out of energy in the next century. 2. Recent studies indicate that as the price of a barrel of oil rises to $80, the use of biodiesel as an alternative fuel becomes economically viable. 3. As technologies improve, the costs of producing alternatives will likely fall, reducing the cost of replacing oil. 4. Optimal resource allocation involves considering current and future uses, benefits and costs. 5. In the extraction of a nonrenewable resource, increased current extraction will reduce the extraction firm's user costs.
Refer to Table 2-9. If the two countries specialize and trade, who should export wristwatches?
A) Thailand B) They should both be importing wristwatches. C) Japan D) There is no basis for trade between the two countries.