Refer to the diagram, where S d and D d are the domestic supply and demand for a product and P c is the world price of that product. With free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers respectively would be:
A. v and vz.
B. w and wy.
C. w and wz.
D. vx and xz.
A. v and vz.
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Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for Fruitopia, a soft drink
Which panel describes what happens in the market for Fruitopia when the price of Snapple, a substitute product, decreases? A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
Other things equal, which of the following will lead to an increase in output and employment?
A) The federal government decides to eliminate the Department of Education. B) The federal government implements a national value-added tax (VAT). C) The federal government passes a tax incentive for firms that employ returning war veterans. D) The federal government reduces the duration and amount of unemployment benefits.
Which of the following is NOT a reason for the weak recovery following the 2007-2009 recession?
A) Recessions started by financial crises are almost always severe. B) The decline in the automobile industry appeared to be structural. C) The collapse of the housing market was long lived. D) The recession was caused by a decline in short-run aggregate supply.
To determine the exchange rate necessary for the price of a good to be equal in two countries, ________
A) divide the higher price by the actual exchange rate B) use the actual exchange rate to convert the foreign price to its domestic-currency equivalent C) choose a good that is traded across borders D) divide the price in one currency by the price in the other currency