If an airport decides to expand by building an additional passenger terminal, and in doing so it lowers its average cost per airplane landing, then the expansion would provide ________ to the airlines
A) higher marginal costs but lower total costs B) higher average costs but lower total costs
C) economies of scale D) diseconomies of scale
C
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If Taiwanese workers can produce all goods at lower wages than American workers, then
a. Americans can still gain by trading with Taiwan. b. Americans can only lose if they import from Taiwan. c. Taiwan can only lose if it trades with America. d. there are no gains from trade that are possible in this case. e. Americans should be self-sufficient.
The value of an original painting, held as an asset, increased in value by 100 percent from 1970 to 2010. Suppose during the same period average prices in the economy rose by 150 percent. The owner of the painting, relative to those who do not own paintings, experienced a:
A. Higher real income as a result of the wealth effect. B. Higher real income as a result of the price effect. C. Lower real wealth as a result of the wealth effect. D. Lower real income as a result of the income effect.
The infant-industry argument about tariffs argues that:
A. it is unfair to levy tariffs on items intended for use by infants. B. tariffs should be levied on foreign products that compete with new domestic industries only in the short run. C. if a newly established domestic industry can survive in the short run, a tariff should be levied to protect it from foreign competition in the long run. D. permanent tariffs should be levied on foreign products that compete with those produced by newly established domestic industries.
Refer to the information provided in Table 19.7 below to answer the question(s) that follow.
Table 19.7 
Refer to Table 19.7. The tax rate structure in this example is
A. proportional. B. regressive. C. progressive. D. marginal.