According to the graph shown, the change in consumer surplus brought about by the imposition of a tariff to an economy previously open to free trade is:
This graph demonstrates the domestic demand and supply for a good, as well as a tariff and the world price for that good.
A. an increase of HIJKL.
B. a loss of HIJKL.
C. a gain of DE.
D. a loss of DE.
B. a loss of HIJKL.
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If Bella eats one piece of pie, she gains a utility of 10. If she continues, a second piece yields a marginal utility of 8, a third will yield a marginal utility of 2, and a fourth piece of pie will yield a marginal utility of 2. We can say:
A. Bella's marginal utility is not diminishing. B. Bella's total utility will decrease if she eats the third piece of pie. C. Bella's total utility will be maximized if she eats three pieces. D. Bella's total utility decreases after the first piece of pie.
Which of the following is not an argument against free trade?
A. Diversification and defense B. Comparative advantage C. Dumping by monopolistically inclined exporters D. Infant industries
Which of the following is a normative economic statement?
a. The Federal budget surplus rose by 10 billion dollars b. A fall in the unemployment rate was forecast for next month c. The Federal funds rate was reduced by half a percentage point d. A trade deficit of 20 billion dollars will harm the economy
Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true?
A. The United States has the absolute advantage in the production of shoes and Canada has the absolute advantage in the production of apples. B. Canada has the absolute advantage in the production of shoes and the United States has the absolute advantage in the production of apples. C. Canada has the absolute advantage in the production of both shoes and apples. D. The United States has the absolute advantage in the production of both shoes and apples.