The figure below shows the domestic demand (Dd) and domestic supply (Sd) curves of mopeds in a country before an import quota is imposed by the government. After the imposition of the quota, the maximum import quantity is QQ.
If the government auctions the quota licenses, the importing nation will
A. gain $21.5 million.
B. lose $29.75 million.
C. lose $10 million.
D. gain $31.5 million.
Answer: A
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Suppose you and your friend are in a shopping mall and you borrow $100 from your friend to pay for a pair of shoes that you purchase in a sho
A) transaction costs. B) indirect financing. C) direct financing. D) moral hazard.
In financial markets, buyers are people who:
A. want to spend money on something of value right now, but don't have cash on hand. B. have cash on hand and are willing to let others use it, for a price. C. want to spend money on something of big value in the future, but don't know how to save for it. D. have cash promised to them at some future date.
A model that is an oversimplification for one purpose will likely be an oversimplification for other purposes as well.
Answer the following statement true (T) or false (F)
Many environmentalists have advocated a substantial increase in the gasoline tax to cut down the federal deficit and to reduce pollution due to auto emissions. Such a tax increase would be devastating to people who commute significant distances to work. In fact, it would provide an incentive to relocate closer to work or change jobs. Economists refer to such effects of taxes as the
a. burden of a tax. b. regressive incidence of a tax. c. incidence of a tax. d. excess burden of a tax.