Imposing a tariff on the import of a good is preferable to a quota because a tariff produces revenue for the government, while a quota never produces any revenue for a government
a. True
b. False
Indicate whether the statement is true or false
False
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How do exports affect buyers' consumer surplus?
What will be an ideal response?
If a consumer is spending all of his/her income in a manner where MUa / Pa = MUb / Pb, then the consumer:
a. should increase the consumption of A and decrease the consumption of B. b. is maximizing his/her utility. c. should increase the consumption of B and decrease the consumption of A. d. should increase the consumption of both A and B. e. should decrease the purchases of both A and B.
To abstract from reality in an economic model means that:
a. we include only a few of the essential aspects of reality. b. the economic study surveys only a very limited period of time. c. we include only those elements which support our hypothesis. d. the model includes every aspect of the real world. e. the model examines the actions of the consumers in the absence of producers and the government.
Answer the following statements true (T) or false (F)
1. The point where the supply curve and the demand curve cross is called the equilibrium. 2. Good weather is an example of a natural condition that affects supply for salmon fishing. 3. The equilibrium quantity is the common quantity where the amount of the product consumers want to buy (quantity demanded) is equal to the amount producers want to sell (quantity supplied). 4. Laws that governments enact to regulate prices are called price barriers. 5. One typical way that economists define efficiency is when it is possible to improve the situation of one party without imposing a cost on another.