Use the following graph, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product to answer the next question.
Sd + Q is the product supply curve after an import quota is imposed. A quota of y?w will result in quota rent equal to areas
A. F + J.
B. E + F + G + H + J.
C. F + G + H + J.
D. G + H.
Answer: D
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A) goal, perfect B) goal, imperfect C) instrument, perfect D) instrument, imperfect
Individuals derive utility from picnics, p, and kayak trips, k. Assuming that an individual's utility is U(p,k) = k0.5p0.5 and income is $100, what is the marginal rate of substitution (MRS) between picnics and kayak trips?
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Indicate whether the statement is true or false
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A. overvalue; undervalue B. undervalue; overvalue C. overvalue; overvalue D. undervalue; undervalue