Refer to the diagram, where S d and D d are the domestic supply and demand for a product and P c is the world price of that product. S d + Q is the product supply curve after an import quota is imposed. Assuming there is no tariff, the import quota:
A. will increase U.S. Treasury revenue by areas G + H.
B. will increase U.S. Treasury revenue by areas E + F + G + H + J.
C. may either increase or decrease the total revenues of foreign producers, depending on the elasticity of domestic demand.
D. will increase the revenues of foreign firms by area E.
C. may either increase or decrease the total revenues of foreign producers, depending on the elasticity of domestic demand.
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To assure a well-defined solution to the consumers' intertemporal choice problems, we must assume that consumers' preferences exhibit the properties that
A) consumers are all identical and that more is always preferred to less. B) more is preferred to less and that consumers prefer diversity. C) consumers like diversity and that more is sometimes preferred to less. D) more is sometimes preferred to less and that first-period consumption and second-period consumption are both normal goods.
Suppose the local market for legal services has an upward sloping supply curve, PL = 150 + 0.0001QL where PL is the price of legal services and QL is the number of hours of legal services
If the equilibrium price of legal services is $250 per hour, what is the aggregate economic rent earned by lawyers in this market? A) $50,000 B) $1,000,000 C) $50,000,000 D) $100,000,000