Assume that the above figure represents the domestic supply and demand for coffee.The domestic price with no trade is represented by $5.50 . The price with free trade is represented by $4.00
Assume that the government places a $1 per pound tariff on imported coffee, which decreases the domestic quantity demanded of coffee by 100 million pounds and increases domestic production by 100 million pounds. Draw the rectangle that would represent the amount of tax revenue that the government would realize from this tax and calculate the dollar figure.
The amount of tax revenue would be represented by the black rectangle which is $300 million ($1 x 300 million pounds of imported coffee).
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A) subprime B) Alt-A C) catastrophic D) variable rate
In calculating the benefit-cost ratio, social benefits and costs are discounted at the
a. internal rate of return b. federal funds rate c. Treasury Bill rate d. long-term government bond rate e. none of the above
If the marginal utility of each good consumers buy does not diminish but remains constant, we should witness consumers:
a. buying no goods at all. b. spending all of their income on the good with the highest MU. c. buying one of each good. d. buying only the least expensive goods. e. become indifferent to what goods they buy.
Since the 1970s, the Phillips curve has:
a. remained stable. b. moved in a clockwise direction. c. been unstable. d. been used as a reliable model to guide public policy.