When a country imposes tariffs, it is likely to cause
A. Lower prices for domestic production.
B. Higher prices for the import-competing goods both domestically and abroad.
C. Less expensive exports.
D. Increased quantities of imports.
Answer: B
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According to new growth theory, economic growth is driven by
A) new ideas. B) the division of labor. C) positive externalities. D) higher birth rates.
The number of firms in a monopolistically competitive market will be smaller if
A) the market demand curve shifts rightward. B) the minimum efficient scale is lower. C) fixed costs are smaller. D) fixed costs are larger.
A monopolist hires fewer workers than a perfectly competitive industry, other things being equal, because
A) a monopolist has to pay higher wages in order to attract additional workers. B) the monopolist substitutes more capital for labor when compared to a competitive industry. C) the monopolist producer has to deal with unions and face higher wages than do competitive industries. D) the monopolist produces less output than a competitive industry.
The multiplier principle indicates that if business decision makers become more optimistic about the future and, as a result, increase their investment expenditures by $82 billion, real GDP
a. will increase by less than $82 billion if the economy was initially operating well below capacity. b. will increase by more than $82 billion if the economy was initially operating well below capacity. c. will increase by more than $82 billion if the economy was initially operating at full-employment capacity. d. will decline if the marginal propensity to consume is less than 1.