The basic difference in the economic effects of a tariff compared with a quota is that a:
A. Quota reduces domestic consumption of the product, but a tariff does not
B. Tariff allows imports to increase if demand increases, whereas a quota does not
C. Tariff raises product prices, but a quota does not
D. Quota raises product prices, but a tariff does not
B. Tariff allows imports to increase if demand increases, whereas a quota does not
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In reality, the profit-maximization rule to set marginal revenue equal to marginal cost, is a(n) ________ rather than a(n) ________.
A) operational rule; target B) obtainable goal; operational rule C) operational rule; goal D) target; operational rule
Markets can be missing:
A. because a market is taxed. B. when the sale of a particular service is banned. C. when miscommunication of information between buyers and sellers leads to the wrong equilibrium price. D. All of these are true.
All other things constant, goods will have more __________ demand if their price uses up a __________ proportion of a consumer's budget
a. price-elastic; greater b. unit-elastic; smaller c. price-elastic; smaller d. price-inelastic; greater e. stable; greater
Prices are useful in coordinating society's economic planning because
a. they convey information about which goods are scarce and which are plentiful. b. economies based on price systems are more flexible than centrally planned economies. c. economies based on price systems are more likely than centrally planned economies to minimize the cost of producing society's output. d. All of the above are correct.