Explain the impact for producers, consumers, and the government of a tariff imposed on imported lumber.
What will be an ideal response?
Answers will vary but should indicate that consumers lose more than both producers and the government gain from a tariff. Tariffs imposed on imported lumber pose a barrier to market entry for foreign suppliers, which strengthens the position of domestic suppliers who increase supply at higher prices, and thus, gain from the tariffs. The government also gains the revenues generated by the tariff payments from foreign sources. However, these gains do not make up for the losses experienced by consumers who are subject to higher lumber, wood furniture, and paper prices and a loss of consumer surplus.
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One reason why, in the last four decades, the number of new auto makers in the world has been very small compared to the past is that
A) governments restrict who can produce automobiles. B) new auto makers cannot obtain necessary inputs to produce new cars. C) new producers cannot match the economies of scale of existing auto makers. D) the automobile cannot be improved upon in any way by new producers.
If Tattling Tina does not tattle, what would Bratty Brenda's best response be
a. Hit b. Not hit c. Run d. Hide
The imposition of a binding price floor on a market
a. causes quantity demanded to be greater than quantity supplied. b. causes quantity demanded to be less than quantity supplied. c. causes quantity demanded to be equal to quantity supplied. d. causes a decrease in demand.
When producing a good generates negative externalities, the private market for that good tends to produce too:
A. little of the product at too low a price. B. little of the product at too high a price. C. much of the product at too low a price. D. much of the product at too high a price.