Which of the following describes how import quotas on sugar generally affect producer surplus as shown in Exhibit 2?
a. eliminated
b. unchanged
c. decreased
d. increased
d. increased
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Between 1980 and 2014, income inequality in the United States has increased in part due to expanding international trade. How does expanding international trade contribute to income inequality?
A) It reduces the cost of producing goods and therefore lowers the value of labor's services. B) It allows producers to exploit workers and reduce the wages they are willing to pay workers. C) It increases the demand for a wide array of products which in turn increases prices beyond the reach of average-income individuals. D) Domestic firms can now hire low-skilled workers anywhere in the world, putting U.S. workers in competition with foreign workers. This has caused the wages of unskilled workers to be depressed relative to the wages of other workers.
An increase in the price of butter is likely to cause the demand for:
A. olive oil to increase. B. olive oilto decrease. C. butter to increase. D. butter to d.
An economy in a downward phase of the business cycle will, according to internal cycle theory,
a. continue on its downward path unless the government intervenes b. continue on its downward path unless technological innovation occurs c. continue on its downward path unless consumption spending increases d. eventually recover because capital stock wears out and needs replacement e. eventually recover because saving rates fall
By using the ceteris paribus assumption in conjunction with a model, economists can
A) suspend the rationality assumption. B) avoid having their model depend on any additional assumptions. C) hold certain factors constant. D) be sure that the model will predict correctly.