Suppose a certain country imposes a tariff on a good. Which of the following results of the tariff is possible?
a. Consumer surplus decreases by $100; producer surplus increases by $100; and government revenue from the tariff amounts to $50.
b. Consumer surplus decreases by $200; producer surplus increases by $100; and government revenue from the tariff amounts to $50.
c. Consumer surplus increases by $100; producer surplus decreases by $200; and government revenue from the tariff amounts to $50.
d. Consumer surplus decreases by $50; producer surplus increases by $200; and government revenue from the tariff amounts to $150.
b
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With only two goods, if the income effect is in the opposite direction as the substitution effect but the income effect dominates then the good is
a. normal b. inferior but not Giffen c. Giffen d. There is not enough information to answer.
The purchasing power parity method of comparing income across countries is based on
What will be an ideal response?
Exhibit 5-1 Demand curve
?
In Exhibit 5-1, between points a and b, the price elasticity of demand is:
A. 0.67. B. 1.5. C. 2.0. D. 1.0.
The unit of account characteristic of money:
A. means that money finalizes payments. B. makes it difficult to compare the relative prices of goods and services. C. means prices are expressed in terms of money. D. refers to how we use money to transfer purchasing power over time.