The General Agreement on Tariffs and Trade is an international agreement
A. to establish the North American continent as a free trade area.
B. to encourage world trade by lowering tariffs and other trade barriers.
C. to make all tariffs illegal.
D. to encourage peaceful settlements of trade disputes, but has no particular point of view about the desirability of higher or lower tariffs.
Answer: B
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The efficiency of monopolistic competition
A) is as clear-cut as the efficiency of perfect competition. B) depends on whether the gain from extra product variety offsets the selling costs and the extra cost that arises from excess capacity. C) comes from its excess capacity. D) is eliminated in the long run. E) is equal to that of monopoly.
When a price support is set below the equilibrium price, producers ________ the quantity supplied, and consumers ________ the quantity demanded
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease E) do not change; do not change