Governments sometimes subsidize domestic industries. When this occurs
A) the governments will not impose tariffs.
B) the subsidized sell less in international markets because it is more profitable to sell at home.
C) the subsidized industries have an advantage on international markets relative to non-subsidized firms. For this reason, other countries often impose tariffs on the subsidized imports.
D) the subsidized industries have an advantage on international markets relative to nonsubsidized firms. However, this is not an argument for imposing tariffs and tariffs would violate international agreements.
Answer: C
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Price ceilings cause
a. Some suppliers to drop out of the market b. A decrease in the total production in the market c. The creation of black markets d. All the above
Which economic concept is the closest to the saying "There's no free lunch"?
a. Specialization b. Unlimited wants c. Underutilization of resources d. Opportunity costs e. Overutilization of resources
The prices producers charge to cover the cost of supply may be seen on a:
a. television economic update b. trade journal c. index table of interest rates d. supply curve
The market demand in a Bertrand duopoly is P = 10 ? 3Q, and the marginal costs are $1. Fixed costs are zero for both firms. Based on this information we can conclude that:
A. P = $7 and firm 1 will sell 7 units of output. B. P = $1 and firms 1 and 2 will each sell 7 units of output. C. P = $1.5 and firms 1 and 2 will each sell 10 units of output. D. P = $1 and firms 1 and 2 will each sell 1.5 units of output.