Figure (a) represents the domestic demand and supply of televisions. Suppose free trade is allowed and the current world price of televisions is P1 as shown in Figure (b). As a result of free trade the domestically produced quantity would
a. fall to Q1.
b. rise to Q2.
c. fall to Q3.
d. rise to Q4.
a. fall to Q1.
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The interest rate that banks charge other banks for loans is the
A) discount rate. B) prime rate. C) federal funds rate. D) Treasury bill rate.
In a competitive industry
a. firms have no cost advantages b. some firms have cost advantages, while others do not c. all the firms have highly differentiated products d. Consumers have strong preferences across brands
A mixed economy is one in which ________.
A) both resources and means of production are extremely limited and generally confined to agricultural produce B) the government or other centralized group determines and controls all resources and means of production C) both individuals and government control resources and determine production methods D) either individuals or private firms control resources and determine production methods E) there is no government intervention whatsoever in industry
Assume that the price of labor and capital have remained the same, but that the average educational level of workers has increased and therefore the productivity of labor has increased. This would lead a firm to
A. use only labor to produce the product. B. use a more capital-intensive production technology. C. use a more labor-intensive technology. D. not change its production technology, but to produce fewer units of output.