Refer to the information provided in Figure 6.7 below to answer the question(s) that follow.
Figure 6.7Refer to Figure 6.7. Along budget constraint AB, the price of good X is $25 and the price of good Y is $18. If the price of Y decreases to $14, the budget constraint will
A. shift in parallel to AB.
B. pivot out at point A.
C. pivot in at point A.
D. pivot in at point B.
Answer: B
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A market in which a single firm can produce, at a lower cost than multiple firms, the entire quantity of output demanded is called:
A. diseconomies of scale. B. government intervention. C. a natural monopoly. D. price gouging.
The traditional view regarding population and growth in DVCs is that:
A. The most important factor affecting population growth in DVCs is per capita consumption of energy B. Unemployment and underemployment are the major sources of population growth in DVCs C. Reduced birthrates must come first in DVCs, and then higher per capita incomes will follow D. Higher per capita incomes must come first in DVCs, and then reduced birth rates will follow
People know that the inflation rate will decrease from 7 percent to 3 percent. As a result
A) the nominal interest rate falls by 4 percentage points. B) the nominal interest rate is constant. C) the nominal interest rate rises by 4 percentage points. D) the nominal interest rate equals 3 percent.
Economic theory in general, and trade theory in particular are replete with equivalencies
For example, it is argued that for any specific tariff one can find an equivalent ad valorem tariff; and that for any quota one can calculate a tariff equivalent. Discuss conditions or situations under which a specific and an ad valorem tariff are not equivalent. Discuss conditions or situations when a tariff and a quota are not equivalent.