A small country is considering imposing a tariff on imported wine at the rate of $5 per bottle. Economists have estimated the following based on this tariff amount: World price of wine (free trade):$20 per bottleDomestic production (free trade):500,000 bottlesDomestic production (after tariff):600,000 bottlesDomestic consumption (free trade):750,000 bottlesDomestic consumption (after tariff):650,000 bottles The consumption effect of the tariff on wine is worth about
A. $3.5 million.
B. $2.75 million.
C. $500,000.
D. $250,000.
Answer: D
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International trade is most likely to occur whenever
a. one of the trading nations is self-sufficient b. all of the trading nations are self-sufficient c. one of the trading nations gains from trade d. each of the trading nations gains from trade e. labor is cheaper abroad
Which of the following did classical economists believe caused depressions and high unemployment?
a. Sticky product prices b. Tax increases c. Business expectations d. Sticky wages e. Sticky interest rates
An American citizen works for a U.S.-owned architectural firm located in Mexico. This architect will contribute toward:
A. U.S. GDP since he's a U.S. citizen. B. U.S. GDP since he's working for a U.S. firm. C. Mexico's GDP since he's working in Mexico. D. both Mexico's and U.S. GDP.
Financial intermediaries that are collected pools of funds from many investors are called: a. mutual funds. b. banks
c. credit unions. d. stockbrokers.