Opening this economy to trade would benefit ________ and harm ________.
A. domestic TV producers; domestic TV consumers
B. domestic TV consumers; domestic TV producers
C. everyone; no one
D. no one; everyone
Answer: B
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Refer to Edgeworth Box Economy. In an Edgeworth box, points within the region of mutual advantage represent allocations that
a. can be achieved by a competitive market. b. both consumers prefer to the initial endowment. c. exhaust the potential gains from trade. d. are Pareto optimal.
If the farmer is producing 5000 bushels of soybeans at point "b" in the above figure, we know that
A) the farmer is not using his resources efficiently. B) the farmer is using his land to produce a crop other than soybeans or corn. C) the farmer must be using more land than was used in constructing the production possibilities curve. D) the farmer is using his resources efficiently.
Factory A can reduce emissions at a cost of $250 per ton. Factory B can reduce emissions at a cost of $400 per ton. In a system in which the government issues transferable pollution right at a price of $200 per ton:
a. Factory A can profit from selling its pollution rights to Factory B. b. Both firms have an incentive to buy pollution rights c. Factory B can profit from selling its pollution rights to Factory A. d. Both firms have an incentive to sell pollution rights.
If government purchases increases by $1 million while net taxes are unchanged, then:
A. private saving increases. B. public saving does not change. C. public saving increases. D. public saving decreases.