Why do countries impose protection even if it lowers economic welfare? Explain fully
What will be an ideal response?
Governments may not be interested in maximizing economic welfare. Instead they have need for revenues, they may want to redistribute income, there may be second best considerations or national defense reasons, etc.
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The World Bank has extended a loan to Country X to build a new toll road and counts on the repayment of the loan from the collected tolls
After the funds have been transferred to the country, the government decides to spend the money to build a new presidential palace. This is an example of A) adverse selection. B) hostile selection. C) government risk. D) moral hazard.
Assuming farmers can plant either corn or soybeans, as U.S. farmers plant more corn to meet rising global demand
A) the opportunity cost of producing corn increases. B) the opportunity cost of producing corn decreases. C) the U.S. PPF for corn and other goods and services shifts outward. D) the United States produces at a point beyond its PPF.
A key objective of a government safety net for the banking system is to ensure ________
A) that the poor have access to bank services B) an efficient allocation of credit C) bank profitability D) that depositors always believe that their money is safe in the bank
In oligopoly, minimum efficient scale is large relative to the market
a. True b. False