If the government restricts the selling of corn so that the quantity is less than the equilibrium quantity, then the policy I. creates a deadweight loss. II. decreases total surplus
A) Only I is correct.
B) Only II is correct.
C) Both I and II are correct.
D) Neither I nor II is correct.
C
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What is the best hope for reducing environmental pollution in less-developed nations?
A) limiting international trade B) boycott of polluting nation's products C) producing the goods in advanced, economically developed nations D) free international trade that raises incomes in less-developed nations E) strong international standards for pollution control
When there is an external cost, the unregulated market
A) overproduces the good or service. B) underproduces the good or service. C) reaches the most efficient solution. D) minimizes public welfare.
Refer to the graph below.
The graph indicates that as more eggs are produced, the marginal opportunity cost of:
A. eggs increases while the marginal opportunity cost of rye decreases. B. eggs decreases while the marginal opportunity cost of rye remains constant. C. eggs increases while the marginal opportunity cost of rye remains constant. D. both eggs and rye increases.
Initially trade between the United States and Canada is balanced. Then, if a change in the exchange rate reduces the U.S. dollar price of Canadian goods, ceteris paribus, we would expect
A. a trade surplus in Canada. B. a trade surplus in the United States. C. a trade deficit in Canada. D. a trade deficit in both countries.