What is dumping and why do nations dump? Is dumping on U.S. markets legal? How can we detect dumping?
Dumping is exporting a good at a price below its cost of production. The goal of dumping is to drive
competitors out of business to gain monopoly power in order to eventually raise price and profit. Dumping
on U.S. markets is illegal. One way of detecting a dumping practice is to compare the export prices of the
foreign producer to the prices it charges in its own domestic market.
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Explain what is meant by the term ceteris paribus. Why is this concept often used in economic models?
What will be an ideal response?
The idea that business firms attempt to maintain a fixed relation between their stock of capital and their expected sales is the basis for the
A) accelerator hypothesis of net investment. B) permanent-income hypothesis. C) life cycle hypothesis. D) adaptive expectations approach.
Dr. Franke, a perpetual critic of economics, notes that a recent consultant to his medical practice had advised him to raise the prices he charged in order to raise his business revenues. At a university fundraising event he commented to the Chancellor regarding "how ludicrous" some of his faculty members were in giving advice that would drive customers away. He advised the Chancellor that more
"practical, experienced faculty" such as hired by the local Technical College were needed. If demand for Dr. Franke's services is inelastic a. customers would increase and revenues drop b. customers would increase and revenues expand c. customers would decrease and revenues drop d. customers would decrease and revenues expand e. only cross-price elasticity is related to revenues
Recall from the text when Amar Bazazz discovered that very little of the actual gold deposits were ever taken from his cave, he inadvertently discovered the concept of
a. excess reserves b. bank liabilities c. loanable funds d. required reserves e. fractional reserves