The underlying psychological foundation of individual choice and economic reasoning is:
A. focal point equilibrium.
B. bounded rationality.
C. generosity.
D. self-interest.
Answer: D
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The United States has a balance of payments surplus with Europe. We would therefore expect the supply of euros to be __________ the demand for euros. Consequently, the euro should __________
A) less than; appreciate B) greater than; depreciate C) less than; depreciate D) greater than; appreciate
Answer the following statements true (T) or false (F)
1. The revenue and protective purposes of a tariff are largely incompatible. 2. Tariffs bring about a transfer of income from the consumer of the protected product to domestic producers of the product. 3. For an anti dumping tariff to be imposed in the United States, competitive damage from dumping must be shown. 4. Perhaps the strongest argument for trade restrictions is that they protect U.S. workers from low-wage foreign workers. 5. During times of recession, retaining the domestic economy’s money at home is a valid argument for restricting imports.
When the government imposes an effective price ceiling on a monopolist, what will be sure to happen in the short run?
A. The dollar price will increase. B. There will be a shortage of the product. C. The dollar price will fall. D. There will be a surplus of the product.
A monopolist
A. faces an upward sloping demand curve. B. faces a vertical demand curve. C. is a price searcher. D. is a price taker.