Refer to Figure 7-2. The tariff causes domestic consumption of coffee
A) to rise by 20 million pounds. B) to fall by 27 million pounds.
C) to rise by 6 million pounds. D) to fall by 7 million pounds.
D
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The branch of economics which studies how households and firms make choices, interact in markets, and how government attempts to influence their choices is called
A) microeconomics. B) positive economics. C) normative economics. D) macroeconomics.
If the exchange rate between the U.S. dollar and the Mexican peso (pesos per dollar) is less than the relative purchasing power between the two countries, which of the following would be true?
A) Purchasing power parity predicts that the dollar is overvalued as traders take advantage of arbitrage opportunities. B) Purchasing power parity predicts that the value of the dollar will fall as traders take advantage of arbitrage opportunities. C) There are opportunities for profit by purchasing goods in the United States and then selling them in Mexico. D) There are no arbitrage opportunities for which traders can take advantage.
President Obama is hoping to increase the federal minimum wage to $10.50 per hour. Use a diagram to illustrate the effect this increase would have on unskilled labor if:1) demand for labor is nearly vertical.2) demand for labor is very elastic 
What will be an ideal response?
One way of addressing the associated market failure that generates both private costs and external costs is for this activity to be
A) left alone. B) taxed. C) subsidized. D) banned.