In general, who will benefit as the result of a tariff? I. Domestic producers II. Domestic consumers III. The domestic government
A) I only
B) II only
C) both I and III
D) both II and III
E) All of the above are correct.
C
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If the production possibilities curves of two countries have the same slope,
a. neither has a comparative advantage, and there are no gains from trade. b. although there is no comparative advantage, there are potential gains if there are differences in absolute advantage. c. neither has an absolute advantage, and there cannot be gains from trade. d. both have an absolute advantage, and can gain from trade.
When inflation causes relative-price variability,
a. consumer decisions are distorted and the ability of markets to efficiently allocate factors of production is impaired. b. consumer decisions are distorted, but markets are still able to efficiently allocate factors of production. c. consumer decisions are not distorted, but the ability of markets to efficiently allocate factors of production is impaired. d. consumer decisions are not distorted and markets are still able to efficiently allocate factors of production.
Suppose that everybody pays the same price for auto insurance. What should happen to the price of insurance if the law changes from a system where there is mandatory auto insurance to one where there is voluntary auto insurance?
What will be an ideal response?
If the economy were at its potential output level, which of the following is not true?
a. The actual unemployment rate would equal the natural rate. b. There would be some cyclical unemployment. c. There would be some frictional unemployment. d. There would be some structural unemployment.