Hughes and Cain (2011) ask: Who suffered from the tariff in the 19th century? What was their answer?
(a) the government
(b) producers of import-competing goods
(c) consumers
(d) workers in import-competing industries
(c)
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The table above shows the marginal costs and marginal benefits of college education. If the market for college education is perfectly competitive and unregulated, how many students are enrolled in college?
A) 12 million B) 20 million C) 16 million D) 24 million
Suppose there is a market that has market demand characterized as X = 30 - P/3. Suppose further that market supply can be written as X = P/2 - 2.
(A) Find the equilibrium price and quantity in this market. (B) If a unit tax of $16 is imposed on good X, what are the equilibrium price, quantity, and tax revenue in the market? (C) Suppose an ad valorem tax of 30 percent is imposed on good X. The after-tax demand equation would be X = 30 - P/2. Now find the equilibrium price, quantity, and tax revenue in the market. (D) What can be said about the amount of tax revenue generated under each taxing scheme, and why?