The rate at which a country can trade domestic products for imported products is its:
A) rate of production transformation.
B) rate of market substitution.
C) terms of trade.
D) production possibilities curve.
Answer: C) terms of trade.
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An economic service need not be
a. useful. b. scarce. c. transferable. d. tangible.
Automobile manufacturers commonly sell new car models at the full suggested retail price during the first few years the car is on the market, and they do not offer rebates or discounts
After the initial sales period, the manufacturers typically offer rebates or discounts on these models. The marginal cost of manufacturing the cars is constant across time. Which of the following statements is true? A) The firms practice peak-load pricing by charging a higher price in the initial sales period. B) Early buyers have higher reservation prices for the new models, and the manufacturers maximize profits by charging these buyers a higher price. C) The marginal revenue from buyers who purchase these cars after the initial sales period must be lower that the marginal revenue from early buyers. D) To maximize profits, the firms equate the buyers' reservation prices across time.
If the market supply curve is perfectly elastic and an excise tax is imposed,
a. all of the tax is paid by buyers b. all of the tax is paid by sellers c. the tax burden is divided equally between buyers and sellers d. the market price will not change e. the market price will fall by the amount of the tax
If the government establishes a target price for particular agricultural products, then
A) the government sets a limit on the quantity of a product that a farmer is allowed to bring to market. B) farmers are paid to take part of their land out of cultivation, the intent being to reduce supply and raise price to the target level. C) farmers are given limits as to the number of acres that can be used to produce a particular product, the intent being to reduce supply and raise price to the target level. D) farmers are paid the difference between the market price of their product and a government-determined price. E) the government establishes a minimum price that farmers will be paid for their product, which causes the farmers to cut back on the number of acres planted in certain products, which, in turn, causes the price to rise to the target level.