Dolly the sheep made headlines in 1997 because she was the first mammal cloned from the cell of another adult mammal. This technique may eventually allow farmers to clone whole herds of healthy animals. a . Explain what effect a successful sheep cloning
program could have on the market for lamb. b. Explain what effect a successful sheep cloning program could have on the markets for beef and chicken, assuming that cattle and chicken cannot be cloned.
a . This program (which increases the supply of lamb) would shift the supply curve for lamb to the right
(because of an improvement in technology). This increase in supply would lower the price of lamb and
increase the quantity traded.
b. To the extent that consumers consider lamb a substitute for beef or chicken, the demand for beef and
chicken will fall, leading to lower beef and chicken prices thus decreasing the quantity of beef and
chicken traded.
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Why do governments generally prefer to impose tariffs over quotas?
What will be an ideal response?
When the U.S. price level decreases relative to the rest of the world:
A. exports and net exports will increase. B. imports and net exports will increase. C. exports will increase and net exports will decrease. D. exports will decrease and net exports will increase.
Assume soybeans are produced in a perfectly competitive industry. A soybean farmer is currently maximizing his profits. If the market price of soybeans falls, after the farmer adjusts to the new price, he will be producing __________ bushels of soybeans and his profit will be __________.
A) fewer; the same B) fewer; lower C) more; the same D) the same number of; the same
If a monopolist is producing the quantity at which marginal revenue exceeds marginal cost, it should
A) continue to produce this amount if it wants to maximize profits. B) reduce output if it wants to maximize profits. C) reduce price and keep output unchanged if it wants to maximize profits. D) increase output if it wants to maximize profits.