What is the change in total welfare as a result of the tariff on shoes as shown in Exhibit 1?
a. loss of areas d, e, and f
b. loss of areas d and f
c. gain of area e
d. gain of area g
b. loss of areas d and f
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Anything that is commonly acceptable as a payment for goods and services is called ________
Fill in the blank(s) with correct word
Consider a monopolist which sells output in two markets, the home market and the foreign market. Initially the monopolist is unable to price discriminate and sets a single price for both markets
However, the demand in the foreign market is such that at the price the monopoly sets, no goods are sold in the foreign market. If the monopolist is then able to price discriminate, will the overall deadweight loss increase or decrease? Explain.
Banks normally hold few excess reserves because this practice is:
a. subject to an excess reserves tax. b. not profitable. c. against Fed policy. d. illegal.
If the demand-side effects of supply-side tax cuts are greater than the supply-side effects, then we can expect the result to be a(n)
a. decrease in output and prices. b. decrease in output and an increase in prices. c. increase in output and prices. d. increase in output and a decrease in prices.