If a country removes a tariff on imported shoes, we expect the domestic price of shoes to _______ and the quantity of shoes consumed in the domestic market to ________ .
A) fall; fall
B) fall; rise
C) rise; fall
D) rise; rise
Ans: B) fall; rise
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Use the following graph of the market for milk to answer the question below.
The marginal cost for the 27th million gallon of milk is
A. $1.00. B. $2.00. C. $1.50. D. dependent on the marginal benefit.
When interest rates rise,
A) borrowing costs decline, and total planned real expenditures decline. B) borrowing costs increase and total planned real expenditures increase. C) borrowing costs decline, and total planned real expenditures increase. D) borrowing costs increase, and total planned real expenditures decline.
When misallocation of resources for production of a good results in spillover effects on third parties, there is a
A) market failure. B) government failure. C) legislative failure. D) productive failure.
Tennessee emits sulfur dioxide that flows into North Carolina. In meeting sulfur emissions regulations, the Tennessee Valley Authority (TVA), which produces electricity, buys sulfur emission permits from Wyoming. The resulting hot spot problem is:
a. The citizens of Wyoming will experience higher sulfur emissions as a result of the emissions trading program. b. The citizens of Wyoming will experience lower sulfur emissions as a result of the emissions trading program. c. The citizens of Tennessee will pay more to reduce sulfur emissions than if the government used a command-and-control approach. d. The citizens of North Carolina will suffer higher emissions as a result of the emissions trading program.