What is a budget constraint?
What will be an ideal response?
A budget constraint is the limit imposed on household choices by income, wealth, andproduct prices.
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Which of the following is a reason for the success that firms have in getting the government to erect barriers to foreign competition?
A) The costs from free trade are greater than the benefits. B) The jobs lost to foreign competition are easy to identify but jobs created by foreign trade are often hard to identify. C) People who benefit from foreign trade tend not to vote in elections; people who are harmed by foreign trade are much more likely to vote. D) Firms that are harmed by trade barriers have less money to lobby government officials to eliminate the barriers than do firms that benefit from trade barriers.
Suppose the demand curve for a product is horizontal and the supply curve is upward sloping. If a per-unit tax is imposed in the market for this product
A) buyers bear the entire burden of the tax. B) the tax burden will be shared by buyers and sellers. C) the tax burden will be shared among the government, buyers, and sellers. D) sellers bear the entire burden of the tax.