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In the US ____ gain from trade
buyers
In Ecuador, ____ gain from trade
sellers
As a whole, does the United States or Ecuador benefit from trade?
Both countries benefit from trade.
With an import tariff _____ domestic production from
increase q1 to q2
Domestic consumption ___ from
decrease from q3 to q4
Intuitively, why is A part of the deadweight loss from this tariff?
The incremental cost of domestically producing the additional output increases by area A.
Intuitively, why is B part of the deadweight loss from this tariff?
Consumers purchase fewer units of the good and lose surplus of area B as a result.
When the tariff is eliminated, the quantity supplied by
domestic producers
decreases
When the tariff is eliminated, the quantity demanded by
domestic consumers
increases
When the tariff is eliminated, what is the impact on domestic producers, foreign producers, and domestic consumers?
Foreign producers and domestic consumers win. Domestic producers lose.
Which of the following is not an externality?
Jordan has lung cancer from smoking cigarettes.
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Author
dwrght16
ID
330201
Card Set
Set 1
Description
exam 3
Updated
2017-04-07T22:51:49Z
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