In the figure above, international trade ________ consumer surplus in the United States by ________
A) decreases; $2.88 billion
B) decreases; $1.92 billion
C) increases; $2.88 billion
D) increases; $4.8 billion
A
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Graphically, how does a monopolistically competitive firm determine its profit-maximizing price?
A. The firm determines its profit-maximizing output and then charges the price associated with the point on its demand curve directly above that quantity. B. The firm's pricing structure is set by government regulators. C. It accepts the price set by the industry-wide forces of supply and demand. D. Graphically, it finds the place where MR = MC and charges the price directly to the left of that point.
An economy is at a full-employment equilibrium, and then the aggregate demand curve shifts leftward. As a result, the price level ________ and real GDP ________
A) rises; increases B) rises; decreases C) falls; increases D) falls; decreases E) falls; does not change
When, because of hiring and firing costs, firms retain workers in a recession that they would otherwise lay off, there is said to be
A) labor hoarding. B) a decline in capacity utilization. C) voluntary unemployment. D) involuntary unemployment.
The responsiveness of demand to changes in income holding the good's relative price constant is
A) price elasticity of demand. B) income elasticity of demand. C) elasticity of supply. D) cross price elasticity of demand.