If the United States imposes a tariff on foreign chocolate, how are U.S. buyers of chocolate affected?
A) Their demand for chocolate increases because the U.S. production chocolate increases.
B) The price they pay for chocolate falls, but they consume less chocolate because less is imported.
C) The quantity they consume is unchanged.
D) The price they pay for chocolate falls, and they consume more chocolate.
E) The price they pay for chocolate rises.
E
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In the above figure, Brendan originally consumes at point A. If his income rises and compact discs are a normal good but haircuts are an inferior good then he will begin consuming at a point such as
A) E. B) B. C) C. D) D.
If the marginal product of capital is smaller than the interest rate, then
a. investment in capital will fall. b. people are earning negative rents from capital. c. the supply of current consumption will decline. d. borrowing will increase.
A reduction in the inflation rate would make relative prices
a. less variable, making it more likely that resources will be allocated to their best use. b. less variable, making it less likely that resources will be allocated to their best use. c. more variable, making it more likely that resources will be allocated to their best use. d. more variable, making it less likely that resources will be allocated to their best use.
Foreign direct investment that takes the form of purchasing an existing plant is often called:
a. acquisition FDI. b. greenfield FDI. c. requisition FDI. d. brownstone FDI.