Free trade policies may lead to
A) a decrease in world output.
B) price increases in world markets.
C) some labor sectors experiencing some short-term job loss.
D) none of the above.
Answer: C
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It is usually assumed that a perfectly competitive firm's supply curve is given by its marginal cost curve. In order for this to be true, which of the following additional assumptions are necessary? I. That the firm seeks to maximize profits. II. That the marginal cost curve be positively sloped. III. That price exceeds average variable cost. IV. That price exceeds average total cost
a. All of the above. b. I and II but not III and IV. c. I and III but not II and IV. d. I, II and III, but not IV.
Potential output is the amount produced when: a. firms' and workers' expectations about the price level are realized
b. the actual price level is higher than the price level expected by workers. c. firms and workers have the same expectations about the price level. d. the actual price level remains constant. e. the actual price level is lower than the price level expected by firms.
Suppose that the firm's only variable input is labor. When 50 workers are used, the average product of labor is 50 and the marginal product of labor is 75. The wage rate is $80 and the total cost of the fixed input is $500. What is average total cost?
A. $1.80 B. $0.825 C. $0.63 D. $4.10 E. none of the above
Goods produced by the economic system that are used as inputs in the production of future goods and services are
A. capital goods. B. depreciation goods. C. tangible goods. D. consumable goods.