If we allow free trade in a small nation's industry where there is a domestic monopolist, the monopoly firm:
a. gains even more power.
b. sees its profits rise.
c. becomes a price taker, is not able to charge a higher price, and behaves like a competitive firm.
d. is able to charge a higher price.
Answer: c. becomes a price taker, is not able to charge a higher price, and behaves like a competitive firm.
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What effect have Medicare subsidies had on the consumption of medical services?
A) The consumption of medical services has been unaffected, because people don't consider the financial cost when seeking services related to their health. B) The consumption of medical services has been unaffected, because government restrictions have prevented patients from seeking a level of care above and beyond what they would choose if they had to pay for medical treatment out of pocket. C) The consumption of medical services has increased because Medicare subsidies give people the incentive to seek more care than they would otherwise. D) The effect cannot be measured because it is difficult to quantify the amount of resources devoted to our health care system.
Which one of the following would supply dollars to the foreign exchange market?
a. the spending of U.S. tourists in Europe b. the purchase of U.S. automobiles by Japanese consumers c. the sale of U.S. automobiles to European consumers d. the purchase of an American electronics factory by a Japanese investor