Answer the following statement(s) true (T) or false (F)
1.Producer surplus is the difference between the highest price a consumer is willing to pay for a product and the revenues the supplier receives for it.
2.Free trade might increase the prices paid by domestic consumers, but this negative effect is offset by gains experienced by producers.
3.Through free trade, wealth is sometimes redistributed from producers to consumers.
4.When a country exports a good, domestic consumers are negatively affected.
5.Imports hurt domestic consumers, but the losses are offset by producer gains.
1.false
2.true
3.true
4.true
5.false
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In the balance of payments accounts, changes in U.S. official reserves are recorded in the
A) international currency account. B) current account. C) international reserves account. D) official settlements account. E) capital and financial account.
The above figure shows supply and demand curves for milk. In an effort to help farmers, the government passes a law that establishes a $3 per gallon price support. The loss in social welfare resulting from this price support equals
A) k + i. B) j. C) [$3 ? (Q2 - Q1)] - h. D) $3 ? k.
The Laffer curve is a graph of the relationship between tax rates and:
a. real GDP. b. total tax revenues. c. government spending. d. inflation.
The price effect describes the situation when a monopolist lowers the price of output and, all else equal, total revenue
a. increases. b. decreases. c. is unchanged. d. is maximized.