Suppose, in the United States, each farmer is given a federal agricultural subsidy worth $30,000 . What will be the effect of such subsidy?
a. They discourage domestic agricultural production.
b. They allow U.S. farmers to sell their products for lower prices in foreign markets.
c. They give foreign producers an unfair cost advantage.
d. They increase the amount of agricultural imports into the United States.
e. The price of the primary products decline in the U.S. market.
b
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The Volcker Rule addresses the off-balance-sheet problem involving
A) trading risks. B) selling loans. C) loan guarantees. D) interest rate risks.
Suppose pigs (P) can be fed corn-based feed (C) or soybean-based feed (S) such that the production function is P = 2C + 5S. If the price of corn feed is $2 and the price of soybean feed is $5, what is the cost-minimizing feed combination producing P = 100?
a. C = 50 b. S = 20 c. C = 25, S = 10 d. All points on the P = 100 isoquant, including those listed in a-c would cost the same.
If a competitive firm is operating in short run equilibrium and then its fixed costs fall by 40 percent, it should: a. use more labor and less capital in current production. b. not change its output
c. increase its output. d. decrease its output.
If a positive permanent supply shock were to occur, the resulting equilibrium would be a:
A. higher level of output at lower prices. B. lower level of output and prices. C. higher level of output and prices. D. lower level of output at higher prices.