What are the two types of costs that a well-designed tax policy tries to avoid or minimize?
1 . the deadweight loss that occurs when taxes distort the decisions that consumers make
2 . the administrative burdens that taxpayers pay as they comply with tax laws
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Average consumption in an economy is best measured by ________, while average productivity in an economy is best measured by ________.
A. output per worker; output per person B. output per worker; total output C. total output; output per worker D. output per person; output per worker
If 1 bottle of wine costs 4 loaves of bread in England, then 1 loaf of bread must cost 1/4 bottle of wine. For England to specialize in bread production, England must be a more efficient bread producer than Portugal, which means that England's cost of producing bread must be less than Portugal's cost. Thus if producing 1 loaf of bread in Portugal costs more than 1/4 bottle of wine (or, equivalently, if producing 1 bottle of wine in Portugal costs less than 4 loaves of bread), then England will specialize in bread production and Portugal will specialize in wine production.
What will be an ideal response?
According to the principal of comparative advantage a country
A) that produces goods at the lowest absolute cost will export those goods. B) will import goods it can produce at the lowest relative cost. C) will export goods it can produce at the lowest relative cost. D) will only import those goods that it cannot produce for itself.
Suppose the market for personal computers in Country A is monopolistically competitive. Country A exports as well as imports personal computers from the rest of the world. After full adjustment to the opening of trade, a firm in this industry probably will
A. enjoy a greater market share. B. receive a higher price for its product. C. go out of business. D. receive a lower price for its product.