Tariffs and quotas create a loss in social welfare because
A) producer surplus declines.
B) revenues from tariffs are misspent.
C) consumer surplus declines.
D) All of the above.
C
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Adverse selection is due to
A) hidden characteristics. B) hidden actions. C) symmetric information. D) moral hazard.
A vertical line showing the economy's potential is called the:
A. long-run aggregate supply line. B. short-run aggregate supply line. C. short-run equilibrium output line. D. aggregate demand curve.
Contractionary monetary policy tends to:
A. reduce the interest rate, increase capital inflows, and lower the value of the dollar. B. raise the interest rate, reduce capital inflows, and raise the value of the dollar. C. reduce the interest rate, reduce capital inflows, and lower the value of the dollar. D. raise the interest rate, raise capital inflows, and raise the value of the dollar.
If you operated a small bakery, which of the following would be a variable cost in the short run?
A. Baking ovens. B. Interest on business loans. C. Annual lease payment for use of the building. D. Baking supplies (flour, salt, etc.).