When a nation reduces the barriers to international trade:
A. each individual citizen becomes worse off.
B. the total value of all goods and services produced by the nation falls.
C. the total value of all goods and serviced produced by the nation rises.
D. each individual citizen becomes better off.
Answer: C
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The tables above show the marginal costs and benefits from production of paper. If the market is perfectly competitive and unregulated, the efficient amount of paper will be produced by setting a Pigovian tax of
A) $5 per ton. B) $10 per ton. C) $20 per ton. D) $40 per ton.
DVDs can be produced at a constant marginal cost of $5 per disk, and Roaring Lion Studios is releasing the DVDs for its last two major films. The DVD for Rambeau 17 is priced at $20 per disk, and the DVD for Schreck 10 is priced at $30 per disk
What are the price elasticities of demand for these two movies? A) Both equal -1.2. B) -0.75 and -5/6, respectively C) -1.33 and -1.2, respectively D) -1.33 and -2, respectively