Refer to Figure 35.5. If S1 represents the U.S. domestic supply of a good and S2 represents supply in the United States under conditions of free trade, what does S3 most likely represent?
A. U.S. supply under tariff-restricted trade.
B. Production possibilities under conditions of free trade.
C. U.S. supply under quota-restricted trade.
D. The result of a foreign country dumping this good on the U.S. market.
Answer: A
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A reduction in government spending causes the equilibrium level of aggregate output to ________ at any given interest rate and shifts the ________ curve to the ________, everything else held constant
A) rise; LM; right B) fall; IS; left C) fall; LM; left D) rise; IS; right
If the United Auto Workers union can obtain a substantial wage increase for auto workers, there will be
a. a decrease in the supply of automobiles, which is a shift to the right of the supply curve. b. a decrease in the supply of automobiles, which is a shift to the left of the supply curve. c. an increase in the supply of automobiles, which is a shift to the right of the supply curve. d. an increase in the supply of automobiles, which is a shift to the left of the supply curve.
The supply curve of a product is based primarily on
a. consumer behavior
b. product decision making
c. government spending
d. none of the above
If consumers buy a large number of plug-in electric cars, the equilibrium price of electricity will ________ and the equilibrium quantity of electricity will ________
A) rise; decrease B) not change; increase C) fall; increase D) fall; decrease E) rise; increase