Suppose that a tariff is imposed on imports of minivans. Show graphically what the effect is in terms of price and quantity of imports. Be sure that your graph is completely and correctly labeled. What determines how much of the tariff is paid by the buyers of the minivans?
What will be an ideal response?
?
?
See Figure 34-12. The tariff raises the price from P1to P2, and lowers the quantity imported from Q1to Q2. The primary determinant of what portion of the tariff is paid by the buyers is elasticity of demand. The more elastic demand, the lower the portion paid by buyers. The less elastic demand, the higher the portion paid by buyers.
You might also like to view...
All large financial institutions have to hold a reserve of almost ___% of their demand deposits.
A. 2 B. 10 C. 12 D. 20
Refer to Figure 12-4. Potential GDP equals $500 billion. The economy is currently producing GDP 1 which is equal to $450 billion. If the MPC is 0.8, then how much must autonomous spending change for the economy to move to potential GDP?
A) -$40 billion
B) -$10 billion
C) $10 billion
D) $40 billion
The Federal Open Market Committee (FOMC) serves as the fiscal agent for the U.S. government.
Answer the following statement true (T) or false (F)
The physical output that is due to the addition of one more unit of a variable factor of production is
A) average total cost. B) marginal cost. C) average product. D) marginal product.