In 2017, President Trump considered imposing a tariff on automobiles assembled by U.S. manufacturers in Mexico that were to be sold in the United States. If this tariff was imposed and as a result, some of these manufacturers moved their automobile
assembly from Mexico back to the United States, these firms would be reacting to which of the three key economic ideas?
A) Firms attempt to maximize revenues.
B) Optimal decisions are made at the margin.
C) People are rational.
D) People respond to economic incentives.
Answer: D
You might also like to view...
An understanding of the best ways to produce goods and services is called
a. human capital. b. physical capital. c. technology. d. productivity.
Other things the same, if the price level is higher than expected, then some firms believe that the relative price of what they produce has
a) increased, so they decrease production. b) decreased, so they increase production. c) decreased, so they decrease production. d) increased, so they increase production.
An increase in a per unit production subsidy ______ supply.
Fill in the blank(s) with the appropriate word(s).
Letters are used to represent the terms used to answer this question: price (P), quantity of output (Q), total cost (TC) and average total cost (ATC). Which of the following equations is equal to a firm's average profit?
A) P - ATC B) (P - ATC) × Q C) (P × Q) - TC D) P - TC