What is a Giffen good?
What will be an ideal response?
A Giffen good is something consumers buy more of when its price rises and buy less of when its price falls.
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If an economist is talking about international institutions, governments, and NGOs and the policies that oversee international markets, they are talking about
A) international financial architecture. B) the role of the IMF. C) international exchange rate regimes. D) foreign direct investment.
Refer to Figure 9.8. If free trade in sugar is replaced by a $50 tariff in sugar, consumer surplus will
A) fall by $50. B) fall by $26,250. C) fall by $22,500. D) rise by $50. E) rise by $17,500.
When a moral hazard problem exists for automobile driving, the marginal cost of driving
A) is lowered, and the amount of driving done is raised above the efficient level. B) is lowered, and the amount of driving done is lowered below the efficient level. C) is raised, and the amount of driving done is raised above the efficient level. D) is raised, and the amount of driving done is lowered below the efficient level. E) is raised above the efficient level, but market forces keep the total amount of driving is kept at the efficient level.
If the world price is below the domestic "no-trade" equilibrium price, then with international trade:
a. the domestic shortage can be eliminated by rationing. b. the domestic surplus can be consumed at home. c. the domestic surplus can be exported to the rest of the world. d. the domestic quantity demanded is equal to that supplied by the world. e. the domestic shortage can be met by foreign imports.