The above figure shows the U.S. market for 1 carat diamonds. With free trade, the price in the United States for diamonds is equal to ________ and with the quota illustrated in the figure, the price in the United States is equal to ________
A) $4,000; $2,000
B) $2,000; $3,000
C) $4,000; $3,000
D) $2,000; $2,000
E) $2,000; $4,000
B
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Congress and the president carry out fiscal policy through changes in
A) taxes and the interest rate. B) interest rates and the money supply. C) government purchases and the money supply. D) government purchases and taxes.
Refer to the above figure. Which panel is consistent with the Laffer curve?
A) Panel A B) Panel B C) Panel C D) Panel D
If a bank has $100,000 in demand deposits, reserves of $20,000 . and no excess reserves, then the legal reserve requirement is
a. 10 percent b. 20 percent c. 25 percent d. 30 percent e. 50 percent
If the price of a good is low,
a. firms would increase profit by increasing output. b. the quantity supplied of the good could be zero. c. the supply curve for the good will shift to the left. d. firms can and should raise the price of the product.