When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an exporter of a particular good,
a. consumer surplus increases and total surplus increases in the market for that good.
b. consumer surplus increases and total surplus decreases in the market for that good.
c. consumer surplus decreases and total surplus increases in the market for that good.
d. consumer surplus decreases and total surplus decreases in the market for that good.
c
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Refer to the above figure. Suppose E is the original equilibrium. An increase in the demand for dollars will be reflected in this figure by
A. a decrease in the supply of yen as Japan is able to pay less for U.S. goods. B. an increase in the supply of yen as Japan tries to buy more U.S. goods. C. an increase in the demand for yen as both imports and exports increase. D. a decrease in the demand for yen as the U.S. balance of payments improves.
Every point on a U?shaped long-run average cost curve represents
A. the minimum point of the associated short-run average cost curve. B. the minimum cost at which the associated output level can be produced when the scale of plant can be changed. C. the minimum cost at which the associated output level can be produced when the scale of plant cannot be changed. D. both A and B.
In cases where a common resource is shared by many and technology is well developed,
A. overuse is rarely problematic. B. the resource becomes excludable. C. the resource becomes nonrival in consumption. D. overuse is more likely.
If the government keeps the price of bread low through subsidies, and farmers consequently buy bread to feed to their pigs, we can infer that
A) pigs are more valuable than people. B) pork is more valuable than people. C) the farmers find it efficient to feed bread to pigs. D) the market system is not working. E) waste is occurring because marginal benefit is less than marginal cost.