The figure below shows the market for shoes in a small importing country. Dd and Sd are the domestic demand and supply curves of shoes, respectively.
The imposition of a tariff on shoes caused economic well-being in the country to ________ by an amount measured by the area
A. rise; (a + c).
B. rise; (b + c+ d).
C. fall; c.
D. fall; (b + d).
Answer: D
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Which of the following correctly identifies the trade-off that a budget constraint represents?
A) The amount of one good that has to be given up to purchase an additional unit of the other good B) The optimum combination of goods that a consumer with a given income should purchase C) The maximum amount of two goods that a consumer can purchase given his income D) The amount of income that must be given up to obtain an additional unit of a good
To reduce the principal-agent problem
A) boards-of-directors can tie the salaries of top management to the profitability of the firm. B) managers can inflate profits on financial statements. C) managers can take on more risk than they disclose to investors. D) managers can hide liabilities by not disclosing them on financial statements.
If marginal cost is rising in a competitive firm's short-run production process and its average variable cost is falling as output is increased, then which statement is true?
a. Marginal cost is above average variable cost. b. Marginal cost is below average fixed cost. c. Marginal cost is below average variable cost. d. Average fixed cost is constant.
The Fed's eclecticism reflects:
A. A combination of flexible rules and limited discretion. B. Fixed rules that are set for monetary growth rates. C. Discretionary policy but not rules. D. The targeting of interest rates as the primary goal to be achieved by monetary policy.