Which of the following is NOT a likely result of intraindustry trade based on internal economies of scale?
A) Job creation at domestic firms entering international trade
B) Lower prices for the domestic consumers of the product now being traded
C) Increased sales and lower per unit costs for the firm doing the exporting
D) Higher prices for the exported product
D
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Relative to free trade, when a tariff is imposed in a market for an imported good,
A) the consumer surplus in that market increases. B) the producer surplus in that market decreases. C) the total surplus in that market decreases. D) tariff revenue decreases. E) deadweight loss decreases.
Suppose that a large lake in the middle of Minnesota evaporates, leaving more fertile farm land for growing corn available. Assuming that land and labor are complements in a farming production function, what would happen to the wages earned by workers and rents earned by landowners?
a. Both wages and rents would increase. b. Both wages and rents would decrease. c. Wages would increase, and rents would decrease. d. Wages would decrease, and rents would increase.
Average total cost equals:
A. total fixed cost plus total variable cost. B. average fixed cost minus average variable cost. C. average fixed cost plus average variable cost. D. total cost minus average cost.
You observe that at your current production of lunch boxes, the average total cost of producing lunch boxes is $5 and the marginal cost of producing lunch boxes is $2. What should always happen if you increase lunch box production?
A. Marginal cost will rise. B. Marginal cost will fall. C. Average total cost will rise. D. Average total cost will fall.