Which of the following is NOT correct about the effects of a tariff on an imported product?
A) Tariffs benefit domestic producers by raising price and domestic output.
B) Tariffs increase government revenue.
C) Tariffs mean higher prices and less consumption for consumers of the product.
D) Tariffs increase the efficiency of how resources are allocated.
D
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Countries where investment is
A) relatively unproductive should have current account deficits. B) relatively productive should have current account surpluses. C) relatively productive should have current account deficits. D) relatively productive should have balanced current accounts. E) relatively unproductive should have balanced current accounts.
The following is an example of adverse selection
a. A majority of those applying for well paid jobs are well qualified b. More reckless drivers opt for cars with fewer safety devices c. Individuals living in less secure neighborhoods want to buy more insurance d. Individuals with a strong family history of heart diseases opt to buy less insurance
A subsidy on a product will generate more actual benefit for consumers (and less for producers) when
a. the supply of the product is relatively inelastic. b. the supply of the product is relatively elastic. c. the demand for the product is relatively elastic. d. either a or c is true.
An economy can produce at any point on or inside its production possibilities frontier, but it cannot produce at points outside its production possibilities frontier
a. True b. False Indicate whether the statement is true or false