The ratio at which one country trades a domestic product for imported product is that country's
A. comparative advantage.
B. cost ratio.
C. terms of trade.
D. absolute advantage.
Answer: C
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If profit from producing would be negative, producers will shut down. ?
Answer the following statement true (T) or false (F)
The ________ is the cost of paid by the producer plus any cost paid by everyone else when another unit of a good or service is produced
A) marginal external cost. B) marginal private cost. C) marginal social cost. D) None of the above answers is correct.
If marginal cost is zero, with an optimal two-part tariff
A) total revenue is maximized. B) the firm does not have to charge a fixed-fee portion. C) consumers maximize their surplus D) firms may not maximize profit.
A uniform tax according to the physical quantities of pollution may not be the appropriate way to correct for an externality because
A. a firm will reduce production. B. it places a unfair burden on small producers. C. a uniform tax can only account for social costs and not external costs. D. it may not adequately account for economic damages.