Protectionism achieves which of the following goals?
A. Protection of comparative advantage.
B. Greater consumption possibilities through greater specialization.
C. Protection of infant industries.
D. Protection of absolute advantage.
Answer: C
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Refer to the figure above. What is the producer surplus before Barylia opens up to free trade?
A) $125 B) $250 C) $400 D) $325
The price elasticity of supply of hot dog buns is estimated to be 1.5. Holding everything else constant, this means that a 10 percent decrease in the price of hot dog buns will cause the quantity of hot dog buns supplied to decrease by
A) approximately 25 percent. B) 1.5 percent. C) approximately 5 percent. D) 15 percent.
In a small open economy, Sd = 200 + 500rw and Id = 300 - 200rw. If rw = 0.1, then net exports =
A) -50. B) -30. C) 30. D) 50.
The above figure shows supply and demand curves for milk. In an effort to help farms, the government passes a law that establishes a $3 per gallon price support, but allows farmers to decide how much milk to produce
The government then provides a deficiency payment to guarantee that the farmers receive $3 per gallon. The required deficiency payment equals A) b + c + f + g + h + i + j. B) b + c + f + g + h + i. C) f + g. D) b + c.