In 2012, the United States imposed countervailing duties ranging from 24 to 36% (on imports of about solar panels from China. Which of the following do you predict will happen if the United States decides to eliminate these duties?
a. The U.S. price of solar panels will fall.
b. U.S. production of solar panels will rise.
c. U.S. imports of Chinese solar panels will fall.
d. The U.S. price of solar panels will rise.
Ans: a. The U.S. price of solar panels will fall.
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In the aggregate expenditures model of the economy, a downward shift in aggregate expenditures can be caused by a decrease in
A. taxes or an increase in government spending. B. government spending or an increase in taxes. C. saving or an increase in government spending. D. interest rates or a decrease in taxes.
Monopolies are inefficient because, at the profit-maximizing output level,
A) MC = MR. B) MC does not equal MR. C) MB = MC. D) MB does not equal MC. E) P = ATC.
We distinguish between the long-run aggregate supply curve and the short-run aggregate supply curve. In the long run
A) technology is fixed but it is not in the short run. B) the price level is constant but in the short run it fluctuates. C) the aggregate supply curve is horizontal while in the short run it is upward sloping. D) real GDP equals potential GDP.
Refer to the above table. What is the absolute price elasticity of demand when a price rises from $8 to $8.50?
A) 5.15 B) 1.94 C) 0.515 D) 0.194