If a price ceiling on coffee is set below the market-clearing price, then
A) the quantity of coffee demanded will decrease.
B) the quantity of coffee supplied will increase.
C) the quantity demanded for coffee will increase.
D) all of the above will occur.
E) none of the above will occur.
C
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When looking at the impact of a change in trade policy economists use consumer and producer surplus to look at the winners and losers. Free trade economists insist that
A. there are winners and losers, but that the loss to the losers is greater than the gain to the winners. B. there are winners and losers, but that the gain to the winners is greater than the loss to the losers. C. everyone loses. D. no one loses.
This graph demonstrates the domestic demand and supply for a good, as well as the world price for that good.
According to the graph shown, if this economy were open to free trade, it would:
A. export this good because the world price is greater than the domestic price. B. import this good because the world price is greater than the domestic price. C. import this good because the domestic price is greater than the world price. D. export this good because the domestic price is greater than the world price.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The economy is currently at Point B. The opportunity cost of moving from Point B to Point A is the
A. 120 LCD TVs that must be forgone to produce 20 additional OLED TVs. B. 30 LCD TVs that must be forgone to produce 40 additional OLED TVs. C. 20 OLED TVs that must be forgone to produce 30 additional LCD TVs. D. 40 OLED TVs that must be forgone to produce 120 additional LCD TVs.
Externalities are a measure of the divergence between social costs and private costs.
Answer the following statement true (T) or false (F)