Tariffs are different from quotas because they
A. increase government revenue.
B. increase profits.
C. increase the quantity traded.
D. place all the burden on foreigners.
Answer: A
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If we assume perfect information, perfect mobility of resources, and no transactions costs, then there is little need for firms
a. True b. False
Suppose studies showed that only 15 percent of all teens wear their bike helmets while riding their bikes. If policymakers wish to have more teens wear their bike helmets, they should:
A. inform teens of the social norm. B. not inform teens of the social norm. C. Informing them of the social norm will have no impact on their individual situation. D. The statistic is likely to influence their personal decision, but it is impossible to predict in what way without more information.
When collective decision making is utilized to resolve economic questions regarding the allocation of resources, then: a. everyone will receive an equal share of the output produced
b. the preferences of individuals are of no importance. c. economic efficiency will be assured. d. the role of markets will be replaced by political decision making.
In 1991, the base year, GDP was 5000. In 1993 the GDP deflator was 106. We may conclude that
A. GDP rose to more than 5000 in 1993. B. GDP fell to less than 5000 in 1993. C. GDP remained at 5000 in 1993. D. None of the choices are correct.