Dumping typically occurs because
A. the importing country has assessed significant tariffs.
B. the exporting country usually is experiencing a recession and has excess production.
C. the importing country is experiencing a recession.
D. the exporting country raises its prices to increase profits.
Answer: B
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Asymmetric information exists when
A. both parties to an exchange have all relevant facts about that exchange. B. a good that is either nonrivalrous or nonexcludable is being sold on a market. C. the two parties to an exchange differ in what they know about the good being exchanged. D. neither party to an exchange is knowledgeable about the quality of the good being exchanged.
Natural monopolies have U-shaped cost curves.
A. True B. False C. Uncertain
Many state and local governments find themselves faced with increasing retirement expenditures for retired government employees. These increasing expenditures will ________ GDP because they are categorized as ________
A) increase; government purchases B) increase; gross private domestic investment C) decrease; state and local government purchases D) not change; transfer payments.
Which of the following statements is false?
A) In the case of a negative externality, the market equilibrium is inefficient. B) In the case of a negative externality, when a tax is set equal to the marginal external costs (MEC) efficiency can be achieved. C) In the case of a negative externality, when a tax is set that is greater than the marginal external costs (MEC) inefficiency will result. D) In the case of a positive externality, when a tax is set equal to the marginal external benefits (MEB) efficiency can be achieved.