A ban on exportation of ivory by itself restricts legal supply, raises the world price, and encourages illegal trade.
Answer the following statement true (T) or false (F)
True
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The division of the burden of a sales or excise tax on demanders and suppliers:
a. Is always equal. b. Is always higher for demanders. c. Is always higher for suppliers. d. Depends on the shapes of the demand and supply curves.
When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
The portion of the long-run average cost curve in which economies of scale are experienced shows that as output increases, the
A) average total cost decreases. B) average total cost increases. C) marginal cost increases. D) marginal cost decreases. E) average variable cost is constant and the average fixed cost decreases.
Which of the following may be explained by adverse selection?
a. When banks raise the interest rate on loans, high-risk applicants leave the market. b. When health insurance companies decrease insurance charges but increase deductibles, less healthy people are more willing to purchase insurance. c. As the cost of insurance rises, low-risk applicants reduce their coverage. d. Products are sold at prices that reflect their true value. e. Loan companies do not require down payments.