The above figure shows the U.S. market for 1 carat diamonds. With free trade, the United States produces ________ diamonds and imports ________ diamonds
A) 300,000; 600,000
B) 0; 900,000
C) 100,000; 900,000
D) 100,000; 800,000
E) 500,000; 400,000
D
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Refer to Figure 16-5. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, Congress and the president would most likely pursue
A) expansionary fiscal policy. B) expansionary monetary policy. C) contractionary fiscal policy. D) contractionary automatic stabilizers. E) contractionary monetary policy.
Each of the following factors might interfere with the efficiency of perfect competition except:
a. increasing returns to scale. b. imperfect price information. c. externalities. d. diminishing returns to scale.
A production possibilities frontier that is bowed-inward implies
A) economies of scale. B) diseconomies of scope. C) economies of scope. D) no economies of scope.
When the euro rose relative to the dollar in the early 2000s, it:
A. discouraged European imports and exports B. encouraged European imports and discouraged European exports. C. encouraged European imports and exports. D. discouraged European imports and encouraged European exports.