The European Union's Common Agricultural Policy (CAP) is, in effect
A) a tariff imposed on agricultural exports.
B) a tariff imposed on agricultural imports.
C) a subsidy that reduces the cost of agricultural exports.
D) a subsidy that increases the cost of agricultural exports.
E) a quota that limits production of agricultural goods by EU nations.
C
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According to the standard competitive model, industries with increasing returns would not be profitable. However, economist Paul Romer argues that many industries may be experiencing increasing returns because
a. many important inputs are common property and therefore equally available to all firms. b. many important inputs may be nonrivalrous so that there is no limit to how much they can be used. c. of a decline in the number of monopsonistic firms in labor markets. d. of an increase in the number of firms that are natural monopolies.
As the price of a product falls, the demand for the product increases, ceteris paribus
Indicate whether the statement is true or false
Suppose your bank pays you 5 percent interest per year on your savings account. If prices increase by 5 percent per year over that time, approximately how much real value do you gain by keeping $100 in the bank for a year?
A) $0 B) $1 C) $3 D) $6
The Acme Company is a perfect competitor in its input markets and its output market. Its average product of labor is at its maximum and equals 30. The marginal revenue product of labor is $300. The price of its output
A) is $0.10. B) is $10. C) is $9,000. D) cannot be determined without more information.