Chile is an importer of computer chips, taking the world price of $12 per chip as given. Suppose Chile imposes a $7 tariff on chips. Which of the following outcomes is possible?
a. The price of chips in Chile increases to $19; the quantity of Chilean-produced chips decreases; and the quantity of chips imported by Chile decreases.
b. The price of chips in Chile increases to $16; the quantity of Chilean-produced chips increases; and the quantity of chips imported by Chile decreases.
c. The price of chips in Chile increases to $19; the quantity of Chilean-produced chips increases; and the quantity of chips imported by Chile decreases.
d. The price of chips in Chile increases to $16; the quantity of Chilean-produced chips increases; and the quantity of chips imported by Chile does not change.
c
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With price discrimination, a monopoly
A) converts consumer surplus into economic profit. B) converts producer surplus into economic profit. C) can charge a single price to all customers. D) produces less output than if it does not price discriminate. E) converts consumer surplus into deadweight loss.
The current exchange rate system has which of the following characteristics?
A) The countries of the European Union have adopted the gold standard. B) Several developing countries in Asia have adopted the Bretton Woods system. C) The United States allows the dollar to float against other major currencies. D) The current global foreign exchange system is a fixed system. E) All developing countries allow their currencies to float against the dollar and other major currencies.