Tariffs ________ consumer surplus and import quotas ________ consumer surplus
A) decrease; decrease
B) increase; increase
C) decrease; increase
D) increase; decrease
A
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The current account deficits incurred by the United States in the 1980s were caused, in the opinion of many economists, by
A) federal budget deficits. B) a sharp decline in private saving. C) "flight to quality" as foreign investors favored U.S. investments. D) Both B and C are correct.
A usury ceiling will be effective depending on
A. whether the usury rate is above 10 percent. B. whether the usury rate is above 8 percent. C. whether that rate is below what the equilibrium rate of interest would have been in a free market. D. how well organized the lending institutions are.
Economists agree that:
A. incentives are likely to be inconsequential unless prices are involved. B. sometimes incentives facing a decision-maker will not achieve the desired result. C. markets are always the most efficient means of solving society's problems. D. social and moral pressures cannot be modeled.
Refer to Scenario 13.2 below to answer the question(s) that follow. SCENARIO 13.2: The government of Stratospheria is currently inviting investors to bid for the exclusive right to provide cable television service to its residents. The market demand for this service is P=55-0.01Q, where Q is the number of households that would subscribe to the cable service and P is the monthly fee charged to the subscribers. The associated marginal revenue curve is MR=55-0.02Q. Fun Cable Company is interested in bidding for the right to provide cable service in Stratospheria. It has a constant average and marginal cost of $5 for providing cable service to each household.Refer to Scenario 13.2. What is the most Fun Cable Company would bid for the franchise?
A. $0 B. $62,500 C. $75,000 D. $112,500