How does a tariff affect the domestic price of the import, the domestic consumption, the domestic production, and the quantity imported?
What will be an ideal response?
A tariff raises the price of the good. As a result, domestic consumption decreases as domestic consumers decrease the quantity they demand. And, also as a result, domestic production increases as domestic producers increase the quantity they supply. Because domestic consumption decreases and domestic production increases, the quantity imported decreases.
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When supply increases and the supply curve shifts to the right, equilibrium price ________ and equilibrium quantity ________
A) increases; decreases B) decreases; decreases C) increases; increases D) decreases; increases
Profits not paid out to stockholders are
a. retained earnings. b. known as dividends. c. the denominator in the price-earnings ratio. d. All of the above are correct.