A lump-sum tariff imposed on foreign competitors will:
A. decrease the profits of domestic firms when demand is high.
B. have no impact on domestic firms' profits when demand for domestic goods is high.
C. increase the profits of domestic firms when demand is high.
D. always remove foreign competitors from the market.
Answer: B
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The above table has data from the nation of Atlantica. Based on these data, what is marginal propensity to consume?
A) 1.50 B) 1.00 C) 1.33 D) 0.50 E) 0.75
Suppose the desired reserve ratio is 10 percent. If Urban Bank has total deposits of $1,000 and total assets of $10,000, the amount of desired reserves is
A) $100. B) $900. C) $1,000. D) $9,000. E) $1,100.
Refer to Figure 4-5. Suppose that instead of a price ceiling, the government imposed a price floor of R1. What area represents the deadweight loss after the imposition of the price floor?
A) C + E + J + H B) G + H C) J + H D) C + E
Which of the following illustrates the economic inefficiencies of government regulation?
(a) Railroad rate increases are set by a government agency and these increases fall below increases in repair and depreciation costs but railroad passengers are satisfied. (b) Competitive railroad rates are determined by the buying and selling actions of those in the railroad industry. (c) Rate increases set by government agencies are set to match the increases in repair costs and the acceleration in depreciated capital. (d) Government protects private and individual rights to goods, service and resources.