1.A flawed argument for protection from foreign trade is that i. tariffs save do
ID: 1099437 • Letter: 1
Question
1.A flawed argument for protection from foreign trade is that
i. tariffs save domestic jobs.
ii. tariffs protect the national culture.
iii. quotas bring about diversity and stability.
A. i, ii, and iii
B. i only
C. ii only
D. iii only
E. i and ii
2. If a firm in a perfectly competitive market faces an equilibrium price of $5, its marginal revenue
A. will also be $5.
B. will be greater than $5.
C. may be either greater or less than $5.
D. will be any amount but $5.
E. will be less than $5.
3. When property rights are assigned and transactions costs are low,
A. externalities will result in market failure.
B. the marginal social cost curve shifts rightward and the marginal social benefit curve also shifts rightward.
C. all costs and benefits are taken into account by the transacting parties so the transaction is efficient.
D. the marginal social benefit curve shifts leftward and the marginal social cost curve does not shift.
E. the marginal social cost curve shifts rightward and the marginal social benefit curve does not shift.
4. The production of electricity creates pollution. When deciding how much electricity to buy, customers ________ the cost of pollution. When deciding how much electricity to buy, producers ________ the cost of pollution.
A. do not take into account; do not take into account
B. do not take into account; take into account
C. take into account; do not take into account
D. take into account; take into account
E. None of the other choices answers is correct
5. If a polluting producer is forced to pay a pollution charge, what is the effect on the supply and demand curves for the product?
A. The firm's supply curve shifts leftward.
B. Both the supply curve and the demand curve shift leftward.
C. The quantity supplied along the firm's supply curve increases.
D. The firm's supply curve shifts rightward.
E. The firm's demand curve shifts leftward.
6. One reason why property rights help achieve an efficient level of pollution is because property rights
A. eliminate marginal private costs.
B. force the marginal social cost to zero.
C. force the marginal private cost to equal the marginal social cost.
D. force the marginal external cost to a lower level than marginal private cost.
E. change the marginal external cost so that they are equal to the marginal social benefit.
7. Suevania opens its doors to trade with Barvania. Barvania has a comparative advantage in the production of machinery. Hence, once trade occurs Suevania's consumers will buy ________ machinery and pay ________ before.
A. less; a lower price than
B. the same amount of; the same price as
C. less; a higher price than
D. more; a lower price than
E. more; a higher price than
8. Once international trade occurs, a country with a comparative advantage in the production of a good will ________ production of the good and ________.
A. increase; import the good
B. decrease; export the good
C. increase; export the good
D. decrease; import the good
E. not change; import the good
Explanation / Answer
C. ii only
B. will be greater than $5.
D. the marginal social benefit curve shifts leftward and the marginal social cost curve does not shift.
B. do not take into account; take into account
E. The firm's demand curve shifts leftward.
D. force the marginal external cost to a lower level than marginal private cost.
B. the same amount of; the same price as
A. increase; import the good
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