On a supply and demand diagram, a tariff works by
A. moving the supply curve vertically up by the amount of the tariff.
B. limiting the amount that can be sold to a specific amount.
C. moving the demand curve vertically up by the amount of the tariff.
D. moving the supply curve vertically down by the amount of the tariff.
Answer: A
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What is true of the price elasticity of demand faced by a monopoly firm?
A) Demand is inelastic. B) Demand is more elastic at lower prices and more inelastic at higher prices. C) Demand is perfectly elastic because the monopolist has no competition. D) Demand becomes more elastic as the range of imperfect substitutes expands.
According to the Keynesian model, which of the following policies would be most appropriate during a period of rapid inflation?
a. a tax cut b. a budget deficit c. a budget surplus d. an increase in the money supply
If the Federal Reserve surprises investors by announcing an easing of monetary policy:
A. it should have no impact on the slope of the yield curve. B. we should expect the yield curve to steepen. C. we should expect the yield curve to possibly become inverted. D. the yield curve would flatten.
The law of diminishing returns explains diseconomies of scale.
Answer the following statement true (T) or false (F)