Recall the Application about the cost of using import restrictions to protect jobs in the lumber industry to answer the following question(s).Recall the Application. Import restrictions in the lumber industry in the United States have ________ the supply of lumber and ________ the price of lumber in the United States.
A. increased; increased
B. increased; decreased
C. decreased; increased
D. decreased; decreased
Answer: C
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An unemployed individual decides to spend the day fishing. The opportunity cost of fishing is
A) zero, because the person doesn't have a job. B) the cost of bait, any other monetary expenses, and the value of the individual's wages while he was working. C) the cost of bait and any other monetary expenses. D) the cost of bait, any other monetary expenses, and the value of the best alternative use of the individual's time.
The single-tax movement, headed by Henry George, refers to the idea that
A. taxes on rent are less costly to administer than other taxes. B. rent is a surplus that can be taxed without distorting resource allocation. C. rent should not be taxed because it is a free gift of nature. D. rent is based on a derived demand and should not be taxed.
Which of the following is an example of the monitoring problem?
A. Government fails to stop firms hiring child labor to produce goods. B. The managers of a firm maximize their own salaries to the detriment of maximizing profit for the owner of the firm. C. A firm does not take into account the air pollution caused by a coal factory when pricing its product. D. Two firms collude to set the market price, but the government cannot prove this conclusively.
Which of the following, all else fixed, will cause the real exchange rate to decrease?
A) a nominal appreciation B) an increase in the foreign price level C) an increase in the domestic price level D) all of the above E) none of the above