As shown in the graph, when a government imposes a quota, the outcome differs from that of a tariff being imposed in that area:
This graph demonstrates the domestic demand and supply for a good, as well as a quota and the world price
for that good.
A. F and H are deadweight loss instead of transferred surplus.
B. E represents tax revenues instead of transferred surplus.
C. FGH is deadweight loss instead of tax revenues.
D. G represents quota rents instead of tax revenues.
D. G represents quota rents instead of tax revenues.
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In calculating GDP, "transfer payments" are
A) included because they are re-valuations of existing wealth. B) excluded because no goods or services were produced in exchange for them. C) included because they are payments for labor services. D) excluded because used goods already counted the year they were produced.
In a competitive market economy, a resource in short supply will be allocated
a. so that each firm gets enough to keep producing some portion of its output. b. according to how much each firm purchased before the shortage. c. to those firms that can make the most profitable use of it. d. by government fiat.
Economists avoid using surveys because people often ______.
a. get confused when filling out surveys b. mislead when filling out surveys c. forget to answer certain questions d. don’t have the time to answer all the questions
Refer to the budget line shown in the diagram above. If the consumer's money income is $20, the:
A) prices of C and D cannot be determined. B) price of C is $2 and the price of D is $4. C) consumer can obtain a combination of 5 units of both C and D. D) price of C is $4 and the price of D is $2.