Which of the following is correct? i. A surplus puts downward pressure on the price of a good. ii. A shortage puts upward pressure on the price of a good. iii. There is no surplus or shortage at equilibrium. Question 14 options:
A. i and ii.
B. ii and iii.
C. i, ii, and iii.
D. only iii.
E. i and iii.
C. i, ii, and iii.
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If quota rights accrue to foreigners, then _____.
A) the domestic economy is better off with a quota than with a tariff B) the domestic economy is worse off with a quota than with a tariff C) consumer surplus and economic welfare increase D) production costs decrease E) part of the decrease in consumer surplus is redistributed to the domestic government
Why does quantity supplied increase when price increases?
a. Producers find it more profitable to make the item. b. People "drop out" of the market, so buyers find it more abundant. c. As demand decreases with a high price, surpluses appear. d. All of the above.
During the Reagan administration, the Laffer curve was used to argue that:
A. the supply-side effects of tax cuts are relatively small. B. discretionary tax cuts are unwise because they create stagflation. C. lower income tax rates could increase tax revenues. D. a "flat tax" would simplify the tax code and stimulate economic growth.
H. Ross Perot's famous claim in 1992 that the North American Free Trade Agreement (NAFTA) would cause a "great sucking sound" referred to
A. a rapid increase in U.S. exports to Mexico. B. a huge increase in foreign direct investment in the United States. C. a rapid increase in the wage inequality in Mexico. D. an instant shift of jobs from the United States to the Mexico.