The French highly value domestic production of traditional French cheese made by high-cost, traditional production methods. According to the specificity rule, the most efficient policy tool to protect this traditional industry would be
A. to impose an import tariff on cheeses produced in other countries.
B. to tax French exports of non-traditional cheeses.
C. to impose an import ban on cheeses produced in other countries.
D. to provide a production subsidy to the domestic firms.
Answer: D
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If a society is on its production possibilities frontier, and decides to produce more health care,
a. the cost of producing an additional unit of health care will rise b. it must employ some previously unemployed resources c. its standard of living will rise d. some kind of inefficiency will occur e. the cost of producing an additional unit of some other good will rise
With flexible exchange rates
A. The balance of trade is zero. B. All countries will run either a trade surplus or trade deficit. C. The equilibrium exchange rate is determined in a foreign exchange market. D. Foreign exchange reserves are used to offset balance-of-payment deficits.
Exhibit 3-8 Demand and Supply Data for Video Games ? Price Quantity Demanded of Video Games Quantity Supplied of Video Games $75 400 900 70 450 850 65 500 800 60 550 750 55 600 700 50 650 650 45 700 600 40 750 550 ? In Exhibit 3-8, if the price of video games was currently $45, there would be an ____________ of ______________ video games in this market.
A. excess demand; 700 B. excess demand; 100 C. excess supply; 100 D. excess supply; 600