Refer to the information provided in Figure 20.3 below to answer the question(s) that follow.
Figure 20.3Refer to Figure 20.3. The domestic price of shoes is $80. After trade the price of a pair of shoes is $60. This would cause the number of pairs of shoes produced domestically to
A. remain the same.
B. fall to zero.
C. decrease.
D. increase.
Answer: C
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The Acme Company is a perfect competitor in its input markets and its output market. Its average product of labor is at its maximum and equals 30. The marginal revenue product of labor is $300. The price of its output
A) is $0.10. B) is $10. C) is $9,000. D) cannot be determined without more information.
Which of the following is an example of automatic fiscal policy?
A) The government deliberately raises taxes. B) The government deliberately lowers taxes. C) The government deliberately increases spending. D) The government deliberately decreases spending. E) none of the above
Which statement is true?
A. The recessions of 1973-1975 and 1981-1982 were both mild. B. The recessions of 1973-1975 and 1981-1982 were both severe. C. The recession of 1973-1975 was mild; the recession of 1981-1982 was severe. D. The recession of 1973-1975 was severe; the recession of 1981-1982 was mild.
If a strong, persistent trend in the exchange rate appears to be inconsistent with any form of economic fundamentals, it is called
A. a speculative bubble. B. overshooting. C. uncovered speculation. D. exchange rate parity.