A tariff has the effect of granting ____ a larger share of the domestic market.
A. domestic consumers
B. foreign consumers
C. domestic producers
D. foreign producers
Answer: C
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Joe Doakes is running for reelection. Economic theory predicts he has a strong incentive to
A) heavily discount the value of all future costs of his policies. B) try to provide as many benefits to his constituents as possible prior to the next election day. C) do both A and B above. D) do none of the above.
According to the liquidity premium theory of the term structure
A) because buyers of bonds may prefer bonds of one maturity over another, interest rates on bonds of different maturities do not move together over time. B) the interest rate on long-term bonds will equal an average of short-term interest rates that people expect to occur over the life of the long-term bonds plus a term premium. C) because of the positive term premium, the yield curve will not be observed to be downward sloping. D) the interest rate for each maturity bond is determined by supply and demand for that maturity bond.
The difference between moral hazard and adverse selection is that moral hazard is about:
A. actions that arise after the parties enter an agreement B. unobserved characteristics of people occurring before parties enter into an agreement. C. never happens when adverse selection is a problem. D. None of these statements is true.
Suppose the production function is given by Q = 3K + 4L. What is the marginal product of capital when 5 units of capital and 10 units of labor are employed?
A. 11 B. 3 C. 4 D. 45