Refer to Figure 35.5. S1 represents the U.S. domestic supply of a good and S2 represents supply in the United States under conditions of free trade. If the United States imposes a tariff on this good, what will happen to the quantity imported?
A. Imports will decline as price increases and domestic production decreases.
B. Imports will increase because producers will pass the cost of the tariff on to consumers.
C. Imports will decline as price increases and domestic production increases.
D. Imports will increase as price increases and domestic production increases.
Answer: C
You might also like to view...
Assume that the LCD and plasma television sets industry is perfectly competitive. Suppose a producer develops a successful innovation that enables it to lower its cost of production. What happens in the short run and in the long run?
A) The firm will probably incur losses temporarily because of the high cost of the innovation, but in the long run it will start earning positive profits. B) The firm will be able to increase its economic profits temporarily, but in the long run its economic profits will be eliminated as other firms copy the innovation. C) Initially, the firm will be able to increase its profit significantly, but in the long run its profits will still be greater than zero but lower than its short-run profits because other firms would also innovate. D) This firm will be able to earn above normal profits indefinitely if it obtains a patent for its innovation.
If nominal GDP increased from $5,000 billion in 2010 to $5,500 billion in 2011 and the GDP deflator increased from 130 to 140 over the same time period, what would the 2011 real GDP equal expressed in terms of 2010 dollars?
a. $4,643 billion b. $5,107 billion c. $5,385 billion d. $5,500 billion
Refer to Figure 7.5. Which diagram represents isoquants for inputs that are perfect substitutes?
A. A
B. B
C. C
D. D
Demand for a country’s exports leads to demand for its currency.
Answer the following statement true (T) or false (F)