Which of the following situations will arise in the domestic market following the imposition of a voluntary export restraint?
A. imports increase, domestic production increases, prices increase
B. imports decrease, domestic production increases, prices increase
C. imports increase, domestic production decreases, prices decrease
D. imports decrease, domestic production increases, prices decrease
Answer: B
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Which of the following statements is NOT true?
A. Economic theory often makes unrealistic assumptions. B. Economists ignore details to focus on complex problems. C. Abstraction is not an important part of economic analysis. D. The word theory means different things to economists and to ordinary people.
In the short run, when the Fed increases the federal funds rate,
A) the real interest rate rises and investment does not change. B) the real interest rate is unaffected but investment still decreases. C) the real interest rate rises and investment decreases. D) there is no effect on investment because investment depends on the real interest rate. E) the real interest rate falls and investment increases.
Economists assume maximizing efficiency over other goals:
A. is a guiding principle of policy-making. B. is always the best approach. C. should never be followed. D. may not bring about the best outcome for society.
Applying a price of labor to the law of diminishing returns generates:
a. the law of increasing costs. b. less output as more labor is hired. c. differences in the quality of labor. d. a negatively-sloped labor supply curve. e. specialization and the division of labor.