When a country allows international trade and becomes an importer of a good,
a. domestic producers of the good become better off.
b. domestic consumers of the good become better off.
c. the gains of the winners fall short of the losses of the losers.
d. All of the above are correct.
b
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The aggregate demand curve will shift to the left if
A) government expenditures increase. B) people are more optimistic about their future. C) the nation's exports decrease. D) a reduction in the price level pushes down borrowing costs.
Do firms in a perfectly contestable market earn positive economic profit in the long run? Explain
What will be an ideal response?
Suppose Kate's Great Crete (KGC) has annual variable costs of VC = 30Q + 0.0025Q2 and marginal costs of MC = 30 + 0.005Q, where Q is the number of cubic yards of concrete it produces per year. In addition, it has an avoidable fixed cost of $50,000 per year. KGC's demand function is Qd = 20,000 - 400P. What is KGC's total cost function?
A. TC = 50,030 + 30.005Q + 0.0025Q2 B. TC = 50,000 + 50Q - 0.0025Q2 C. TC = 20,000 - 400P D. TC = 50,000 + 30Q + 0.0025Q2
Economic efficiency is achieved when there is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and
A) economic surplus plus consumer surplus equals producer surplus. B) consumer surplus plus producer surplus is maximized. C) economic surplus is minimized. D) the difference between consumer surplus and producer surplus is maximized.