The figure below shows the market for shoes in a small importing country. Dd and Sd are the domestic demand and supply curves of shoes, respectively.
The production effect of the tariff on shoes is measured by the area
A. a.
B. b.
C. c.
D. (a + b).
Answer: B
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Which economic question does the decision to produce butter instead of guns answer?
a. What to produce? b. How to produce? c. For whom to produce? d. Who has a comparative advantage in gun production? e. Who has an absolute advantage in butter production?
On average across the world, the underground economy is worth about:
A. one-third of GDP. B. one-tenth of GDP. C. one-quarter of GDP. D. one-half of GDP.
If the nominal interest rate is higher than the real interest rate, then inflation must be:
A. positive. B. zero. C. negative. D. higher than the nominal rate of interest.
If a firm that is losing money and that has variable costs of $2,000,000 continues to operate, we may conclude that its total revenue is __________.
Fill in the blank(s) with the appropriate word(s).