Suppose that the United States imposes an antidumping duty on imported steel. Which of the following is likely to occur?
a. The U.S. terms of trade will improve, and U.S. steel imports will rise.
b. The U.S. price of steel will rise, and U.S. steel consumption will fall.
c. The foreign price of steel will rise, and foreign steel consumption will fall.
d. U.S. steel companies will earn lower profits.
Ans: b. The U.S. price of steel will rise, and U.S. steel consumption will fall.
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Farmer Jones knows that the marginal cost to produce a bushel of tomatoes is $5 per bushel. He also knows that a consumer is willing to pay a maximum of $9 for the bushel. The price of the bushel is $6 and Farmer Jones sells his bushel for $6
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