To help pay for the cost of sport related injuries, the government imposes a tax on sellers of all sports equipment. Using the above figure, how much producer surplus is lost from this tax on sports equipment?

A budget line is a straight line designed to show

a. how income is related to hours worked. b. all combinations of two goods that can be purchased with a given income. c. the way a homemaker should divide money among several commodities. d. that if more money is spent on one good, the breadwinner must work all the harder to maintain a satisfactory level of living. e. preferences for goods and services.

Suppose that a worker in Radioland can produce either 4 radios or 1 television per year and a worker in Teeveeland can produce either 2 radios or 5 televisions per year. Each nation has 100 workers, and each country specializes according to the principle of comparative advantage. If Radioland trades 100 televisions to Teeveeland in exchange for 100 radios each year, then each country's maximum

consumption of new radios and televisions per year will be a. higher than it would be in the absence of trade because of the gains from trade. b. the same as it would be in the absence of trade. c. less than it would be in the absence of trade because neither country is specializing in the product in which it has a comparative advantage. d. less than it would be in the absence of trade because Teeveeland has an absolute advantage in both goods and so it cannot benefit by trading with Radioland.