Advertising costs and other selling costs are
A) efficient.
B) fixed costs.
C) variable costs.
D) marginal costs.
E) considered as part of demand because they affect the demand for the good.
B
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An export subsidy has the opposite effect on terms of trade to the effect of an import tariff. Domestically a tariff will raise the price of the import good, deteriorating the domestic terms of trade
A production subsidy for the export product will lower the local price of the export good, lowering the domestic terms of trade for the country. Hence the export subsidy and the import tariff have the same effect. This analysis seems to contradict the first sentence in this paragraph. Discuss this paradox.
The double taxation of saving creates a bias towards _____
a. investment b. consumption c. luxury spending d. the future