This graph demonstrates the domestic demand and supply for a good, as well as a tariff and the world price for that good.
According to the graph shown, if this economy were open to free trade, and decided to impose a tariff, the domestic quantity supplied would increase from:
A. 815 to 1150.
B. 250 to 500.
C. 815 to 1500.
D. 250 to 815.
Answer: B
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The demand for ice cream is _________________ than is the demand for frozen treats because ________________.
A. less price elastic; ice cream requires a smaller portion of one's income B. more price elastic; ice cream requires a smaller portion of one's income C. less price elastic; the scope of the market for ice cream is less broadly defined D. more price elastic; the scope of the market for ice cream is less broadly defined
Using the labels on the graph below, the total cost for both firms at the cost-effective solution is ________, and the excess cost from using the uniform standard is___________
a. ABCGH; CGH b. ACH; CGH c. ACDEH; CDE d. ACH; CDE
One theory that predicts sustained wage and rent differentials is based on the idea that your accumulation of human capital raises the productivity of the other workers and the physical capital in your locale. In this situation, human capital accumulation creates
a. a signaling equilibrium. b. external benefits. c. compensating differentials. d. intertemporal substitutions.
If a bank keeps some of its excess reserves, the money multiplier:
A. increases. B. stays the same. C. goes to zero. D. decreases.