How does a tariff affect the domestic price of the import, the domestic consumption, the domestic production, and the quantity imported?
What will be an ideal response?
A tariff raises the price of the good. As a result, domestic consumption decreases as domestic consumers decrease the quantity they demand. And, also as a result, domestic production increases as domestic producers increase the quantity they supply. Because domestic consumption decreases and domestic production increases, the quantity imported decreases.
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With a given income and prices of goods, Marcus will be in a consumer equilibrium if ________
A) his marginal utility from all goods is the same B) he purchases the same amounts of all goods C) he maximizes his total utility D) his marginal utility from all goods is at its maximum
When an economy is operating at a point on its production possibilities frontier, then
a. consumers are content with the mix of goods and services that is being produced. b. there is no way to produce more of one good without producing less of the other. c. equal amounts of the two goods are being produced. d. All of the above are correct.
Changes in the output of a perfectly competitive firm, without any change in the price of the product, will change the firm's
a. total revenue. b. marginal revenue. c. average revenue. d. All of the above are correct.
If the implicit costs shown for the firm in the Accounting Profits versus Economic Profits table doubled, the firm’s accounting profits would ______.
a. not be affected
b. decline by an amount equal to the change
c. increase by an amount equal to the change
d. decline to match the firm’s economic profits.