Microeconomics explores the allocation of scarce resources from the perspective of small economic units such as consumers and firms

In the above figure, a black market emerges with a

A) price ceiling of $4. B) price floor of $2. C) price floor of $4. D) a rationed quantity 30.

Which of the following statements is true with respect to a tariff on imported cheese?

a. It lowers the price of cheese. b. It lowers domestic cheese producers' profits. c. It creates tax revenues for the government. d. It cannot result in retaliation. e. It increases the amount of foreign cheese sold.