Which of the following is the best example of a quota?
A) a subsidy from the U.S. government to domestic manufacturers of tires to enable them to compete more effectively with foreign producers
B) a limit on the quantity of tires that can be imported from a foreign country
C) a 40% fee imposed on all imported tires
D) a tax placed on all tires sold in the domestic market to help offset the impact of lost jobs in the domestic tire industry.
Answer: B
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Normal rate of return is
A) accounting profit. B) an explicit cost. C) economic profit. D) the amount that must be paid to obtain investment in a business.
Which of the following describes the asymmetry Mancur Olson observed in the incentives to support and oppose trade policy?
A) The benefits of those seeking protection outweigh the costs imposed by the protection. B) The benefits of protection are spread out over a large number of firms and industries, but the costs are concentrated on consumers. C) The benefits of policy are concentrated, and the costs are spread out over a large number of participants. D) The costs of protection are concentrated on a few firms, and the benefits of protection are spread out over a large number of consumers.
An externality refers to an economic event which takes place outside of a market
Indicate whether the statement is true or false
The marginal propensity to consume goods and services can be broken out into the:
a. marginal propensity to invest plus the marginal propensity to save. b. marginal propensity to consume home-produced goods and services plus the marginal propensity to consume imports. c. marginal propensity to spend minus the marginal propensity to save. d. marginal propensity to consume goods plus the marginal propensity to consume services.