Which one of the following statements about tariffs and quotas is correct?
A. Only the tariff produces revenues for the government.
B. Only the quota will cause domestic production to increase.
C. Only the quota will cause domestic prices paid by consumers to increase.
D. Only the quota will cause the quantity of imports to decrease.
A. Only the tariff produces revenues for the government.
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Suppose you are the manager of Big Boards, a firm that produces particle board. To make your particle board, you purchase sawdust from timber farms. During the process of harvesting timber, both lumber and sawdust are produced. If the demand for lumber increases, this will cause the production of sawdust to ________ and the price of sawdust to ________.
A) decrease; fall B) increase; fall C) increase; rise D) decrease; rise
Which of the following would lead to stagflation?
a. demand-pull inflation b. cost-push inflation c. both of the above d. none of the above
The main input into the production of Starbuck's coffee is imported coffee beans. If the dollar depreciates, how will this affect the U.S. retail coffee market?
a. Input prices will fall and supply will decrease. b. Input prices will fall and supply will increase. c. Input prices will rise and supply will decrease. d. Input prices will rise and supply will increase.
Explain the circumstances under which some component of labor income is economic rent.
What will be an ideal response?