Refer to the information provided in Figure 4.4 below to answer the question(s) that follow.
Figure 4.4Refer to Figure 4.4. Assume that initially there is free trade. If the United States allowed drilling for more oil in the Gulf of Mexico, it could
A. decrease the demand for domestic oil.
B. reduce the supply of domestic oil.
C. reduce U.S. oil imports without a tariff.
D. increase the domestic price of oil.
Answer: C
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Which of the following involves signaling?
a. high wage rates attracting a larger pool of applicants for a job b. firms taking advantage of outsourcing when transactions costs are low c. reporting one's college GPA on a resume d. paying higher wages to workers who produce more e. requiring the sales staff to work strictly on commission
Suppose that a price discriminating monopolist is able to divide its market into two groups. If the firm sells its product for $50 to the group whose customers have the most elastic demand, what price are they likely to charge to the group whose customers have the least elastic demand?
A. $50 B. more than $50 C. less than $50 D. The answer depends on the marginal revenue for that group.
The U.S. tax system
A) reduces inequality and shifts the Lorenz curve away from the line of equality. B) reduces inequality and shifts the Lorenz curve toward the line of equality. C) increases inequality and shifts the Lorenz curve toward the line of equality. D) increases inequality and shifts the Lorenz curve away from the line of equality.
If the government increases its spending or reduces its taxes in order to influence the level of economic activity, it is engaging in
a. regulatory policy b. antitrust policy c. monetary policy d. fiscal policy e. supply-management policy