To fully analyze the effects of a tariff on imports of tomatoes, an economist needs
a. only to know the supply and demand curves in the market for tomatoes.
b. only to know about supply and demand in the market for tomatoes and in markets for other products tomato farmers grow.
c. to use general equilibrium analysis.
d. to use a production possibilities curve.
c. to use general equilibrium analysis.
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The menu cost theory suggests that
A) wages and prices move freely and quickly. B) the economy is characterized only by perfect competition. C) there will be no unemployment. D) firms find frequent price changes to be costly.
A common criticism of welfare programs is that they
a. create self-reliant individuals. b. encourage strong family values. c. encourage illegitimate births. d. have increasing benefits over time, in real terms.
NAFTA is an example of a common market.
a. true b. false
Tacit collusion occurs when price- and quantity-fixing agreements among producers
A. are legal. B. are explicit. C. are implicit. D. are nonexistent.