(Consider This) The story about economist Irving Fisher's conversation with his masseuse illustrates that interest payments arise because of:
A. the possibility of inflation.
B. the reality of credit risk.
C. imperfect information about the future.
D. the time-value of money.
Answer: D
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Draw a graph showing the effects of imposing a tariff in the small country case. Describe the results, using the concepts of producer surplus, consumer surplus and deadweight loss
Specifically address the effects on consumers, producers, government revenue and overall national well being, connecting those effects to areas of your graph.
If barriers to entry exist in the market for a product, then:
a. the costs of entry and exit are relatively low. b. there will be few close substitutes of the product in the market. c. firms will be incurring losses in both the short run and the long run. d. firms will tend to have relatively less monopoly power. e. the existing firms will quit the market in the long run due to mounting losses.