As existing firms exit a decreasing-cost industry
A. the position of the LRAC curve doesn't change, but firms move up their LRAC curve.
B. the position of the LRAC curve doesn't change, but firms move down their LRAC curve.
C. the LRAC curve shifts up.
D. the LRAC curve shifts down.
Answer: C
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George and Michael can gain from exchange
A) unless one has an absolute advantage in all goods. B) if each specializes in the production of the good for which he has the higher opportunity cost. C) if each specializes in the production of the good for which he has the lower opportunity cost. D) unless they have different opportunity costs.
Describe the effects on U.S. producers of steel, U.S. and consumers of steel, and the U.S. economy overall, after the United States imposed tariffs on steel imports in 2018. For the overall effect on the United States as a result of the steel tariffs, explain why it matters that the United States is a large importer of steel.
What will be an ideal response?
Assume that policy makers are pursuing a fixed exchange rate regime and that the economy is initially operating at the natural level of output. Which of the following will occur as a result of a revaluation?
A) The real exchange rate will be permanently higher in the medium run. B) The real exchange rate will be permanently lower in the medium run. C) The effects of this revaluation on the real exchange rate will be ambiguous in the medium run. D) The real exchange rate will be unchanged in medium run. E) The nominal exchange will initially fall in the short run and then increase in the medium run.
Which of the following would NOT shift an industry's supply of labor curve?
A. Wage rates in other industries fall. B. Working conditions within the industry become less desirable. C. Wage rates in industries using similar labor rise. D. The wage rate in the particular industry falls.