Governments sometimes subsidize domestic industries. When this occurs
A) the governments also impose tariffs on imports to protect the industries even more.
B) the subsidized industries have an advantage in international markets relative to non-subsidized industries.
C) firms cannot be guilty of dumping because their prices are not below their costs.
D) the subsidized industries sell less in international markets because it is more profitable to sell domestically.
Answer: B
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What will be an ideal response?
If the average price level increases 10 percent per year, and the velocity of money is 2, then the:
A. inflation rate is 10 percent. B. inflation rate is 5 percent. C. inflation rate is 2 percent. D. inflation rate is 20 percent.
Refer to the above diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market:
A. supply has decreased and equilibrium price has increased. B. demand has increased and equilibrium price has decreased. C. demand has increased and equilibrium price has increased. D. demand has decreased and equilibrium price has decreased.
A perfectly competitive industry's market price is found by
A. finding the point on the market demand curve where the largest number of units will be purchased. B. identifying the price at which each firm realizes its largest economic profit. C. the horizontal summation of all the industry firms' individual supply curves. D. locating the intersection of the market demand and market supply curves.