In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices.
B. lower prices.
C. lower output.
D. None of these is true.
Answer: D
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A person weighing uncertainty and risk is judging the ______ or likelihood of a good or bad outcome,
a. Probability b. Perception c. Psychological extent d. Unwillingness
The Coase theorem asserts that, if externalities are present and if private parties can bargain over the allocation of resources at no cost, then
a. the private market will reach an equilibrium in which resources are allocated inefficiently. b. the private market will reach an equilibrium in which resources are allocated efficiently. c. the private market cannot reach an equilibrium. d. a mixture of corrective taxes and subsidies is necessary for a socially optimal equilibrium.
Evidence indicates that tariffs and quotas are
A) beneficial for producers in a protected industry, but not beneficial for the workers in the industry. B) beneficial for producers in a protected industry, but not beneficial for consumers. C) beneficial for workers in a protected industry, but not beneficial for consumers. D) not beneficial for the workers in a protected industry or for consumers. E) b and c
An import quota on a product protects domestic industries by:
A. reducing the foreign supply to the domestic market and, thereby, raising the domestic price. B. increasing the foreign supply to the domestic market and, thereby, lowering the domestic price. C. increasing the domestic demand for the product and, thereby, increasing its price. D. providing the incentive for domestic producers to improve the efficiency of their operation and, thereby, reduce their per-unit costs of production.