Suppose a country, whose production and consumption of cell phones is large relative to the world market, has just entered the global market. If the country is a net-importer of cell phones, we would expect:
A. an increase in both world price and quantity of cell phones.
B. a decrease in world price, and increase in world quantity of cell phones.
C. an increase in world price and decrease in world quantity of cell phones.
D. a decrease in both world price and quantity of cell phones.
Answer: A
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The opportunity cost of taking a semester-long economics class is
A) the cost of tuition and fees only. B) equal to the highest value of an alternative use of the time and money spent on the class. C) the value of the time spent in the classroom. D) the knowledge and enjoyment you receive from attending the class. E) zero because there is no admission charged if you are enrolled in the course.
Refer to the figure below. If the equation of MC of unreported income is MC = 4 + 2X, and the MB of unreported income is MB = 44 - 3X, what will be the amount of unreported income? How much of a change will there be if enforcement becomes more strict, resulting in MC = 9 + 2X?
The short-run effect of a negative supply shock is
A) lower inflation and a declining output gap. B) lower inflation and an increasing output gap. C) higher inflation and a declining output gap. D) higher inflation and an increasing output gap.
Assume the market demand for wheat may be written as
Q = 45 - 2p + 0.3Y + 1pb where Y refers to income and pb refers to the price of barley. Assuming that wheat and barley both sell for $1, and income is $20, calculate the price elasticity, cross price elasticity and income elasticity for wheat.