If the United States imposes a tariff on foreign chocolate, how are U.S. producers of chocolate affected?
A) The quantity of chocolate they sell decreases because U.S. consumption of chocolate decreases.
B) The quantity of chocolate they produce increases.
C) The price at which they sell their chocolate falls.
D) They are harmed because foreign exporters of chocolate increase their supply in response to the higher price.
E) They are unaffected because the quota applies to foreign producers, not to U.S. producers.
B
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The "Buy American" provision in the 2009 stimulus package required that stimulus money be spent only on U.S.-made goods, effectively acting as a quota of zero imports when stimulus money was being spent. In the U.S
steel market, the "Buy American" provision in the 2009 stimulus package would A) reduce the producer surplus received by foreign manufacturers. B) transfer some deadweight loss to producer surplus. C) transfer some producer surplus to consumer surplus. D) convert some consumer surplus to deadweight loss.
What factors constitute the primary determinants of income?
What will be an ideal response?
When considering the interplay of the price and quantity effect of different tax levels, we realize that:
A. there is one tax level that maximizes tax revenues. B. tax revenues will continue to increase at all levels where the price effect outweighs the quantity effect. C. tax revenues will continue to decrease at all levels where the quantity effect outweighs the price effect. D. All of these statements are true.
Beginning from full-employment macro equilibrium, increase in government spending will cause real GDP to: a. increase in the short run. b. decline in the long run
c. decline in the short run. d. increase in the long run.