Refer to the figure above. If A forms a customs union with C, it will import
A) 40 units from B.
B) 70 units from C.
C) 70 units from each.
D) 40 units from B and 70 units from C.
B
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To the casual observer it is often difficult to understand how a company would spend several million dollars building a plant or other structure and then simply stop and abandon the project midway. How can this be justified on economic grounds?
What will be an ideal response?
One potential problem with using fiscal policy to close recessionary output gaps is that:
A. sustained government deficits can be harmful to long-run economic growth. B. it may be offset by automatic stabilizers. C. reductions in interest rates can reduce savings and, therefore, investment. D. decreased government spending can cause inflationary pressure to build.
A monopolist can maximize profits by:
A. following the same rules as a perfectly competitive firm. B. producing at the level of output at which MR = 0. C. selling an output where P = ATC. D. selling as much as he can produce.
A pure monopolist is selling six units at a price of $12. If the marginal revenue of the seventh unit is $5, then the:
A. price of the seventh unit is $10. B. price of the seventh unit is $11. C. price of the seventh unit is greater than $12. D. firm's demand curve is perfectly elastic.