Anything that makes it more difficult to exchange one currency for another tends to
A. increase imports.
B. increase exports.
C. decrease imports.
D. all of the options are correct.
Answer: C
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The figure above shows how the PPF for cell phones and new cell-phone factories can expand. In the figure, if the economy chose the point on this year's PPF that is above point K, the next year's PPF would
A) shift inward along the vertical axis. B) shift inward along the horizontal axis. C) shift outward along the horizontal axis farther than the new PPF shown in the figure. D) shift outward along the vertical axis, not along the horizontal axis. E) shift outward along the horizontal axis, but not as far as the new PPF shown in the figure.
Efficiency losses are
A) deadweight losses caused by consumers being prevented by tariffs from buying products at the world price, products that they value more highly than that price. B) the total loss in consumer surplus from a tariff. C) the increase in producer surplus that is created by a tariff. D) the deadweight loss that is created because domestic firms have to charge higher prices to produce units of output than foreign firms would have to charge.
The U.S. and the Canadian currencies are the only two in the world that are called "dollars."
Indicate whether the statement is true or false
Which of the following best explains the source of consumer surplus for Good A? a. Many consumers pay prices that are greater than the equilibrium price of Good A
b. Many consumers would be willing to pay more than the market price for some units of Good A. c. Many consumers think the market price of Good A is greater than its cost. d. Many consumers of Good A place a value on it that is less than the market price.