When the federal government installs a price support program that requires the government to purchase all of a good not bought in the private economy at the support price, changes in producer surplus
A) are negative.
B) are positive, but more than offset by the cost to consumers and the government.
C) are positive, and not offset by the cost to consumers and the government.
D) and consumer surplus are both positive.
B
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If one country's wage level is very high relative to the other's (the relative wage exceeding the relative productivity ratios), then if they both use the same currency
A) neither country has a comparative advantage. B) only the low wage country has a comparative advantage. C) only the high wage country has a comparative advantage. D) consumers will still find trade worth while from their perspective. E) it is possible that both will enjoy the conventional gains from trade.
Which of the following will contribute to higher wage rates for labor?
a. increased productivity b. increases in capital formation c. a decrease in the supply of labor d. all of the above
A tax levied on imported goods is called a(n) a. excise tax
b. quota. c. foreign profits tax. d. tariff.
An inflationary gap will exist when the full employment level of GDP is
a. equal to equilibrium GDP. b. greater than equilibrium GDP. c. less than equilibrium GDP. d. greater than disposable income.