A country is more likely to have net welfare gains when it imposes a tariff on a foreign monopolist if:
a. the tariff is small.
b. the tariff is large.
c. the tariff revenues are large.
d. the deadweight losses are large.
Answer: a. the tariff is small.
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Steve owns a motorcycle valued at $5,000 and that is his only asset. There is a 5 percent chance that Steve will have an accident within a year. If he does have an accident, his motorcycle is worthless
Steve's utility of wealth curve is shown in the figure above. An insurance company agrees to pay Steve the full value of his motorcycle in case of an accident if he buys the company's insurance policy. The company's operating expenses are $500 per policy. What is the minimum premium that the insurance company will accept? A) $1,000 B) $2,000 C) $500 D) $1,500
What branch of economics involves the collection and use of data to test economic theories? Why is this task often more difficult in economics than it is in physical sciences?
What will be an ideal response?