Rational production decisions require an understanding of
a. trade-offs.
b. opportunity costs.
c. scarcity of resources.
d. All of the above are correct.
d
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Use Figure 9-6 to answer questions a-i
a. Following the imposition of the tariff, what is the price that domestic consumers must now pay and what is the quantity purchased? b. Calculate the value of consumer surplus with the tariff in place. c. What is the quantity supplied by domestic sugar producers with the tariff in place? d. Calculate the value of producer surplus received by U.S. sugar producers with the tariff in place. e. What is the quantity of sugar imported with the tariff in place? f. What is the amount of tariff revenue collected by the government? g. The tariff has reduced consumer surplus. Calculate the loss in consumer surplus due to the tariff. h. What portion of the consumer surplus loss is redistributed to domestic producers? To the government? i. Calculate the deadweight loss due to the tariff.
Which of the following criteria need NOT be satisfied for choosing a policy instrument?
A) The variable must be measurable. B) The variable must be controllable. C) The variable must be predictable. D) The variable must be transportable.