When economists talk about the gains from trade they mean that
A) no one ever gets hurt by trade.
B) the benefits of trade outweigh the losses.
C) business firms benefit from trade but not necessarily individuals.
D) trade increases government revenue through taxes on imports.
E) economic restructuring is usually quick and painless.
B
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The United States imports cars from Japan. If the United States imposes a tariff on cars imported from Japan
A) U.S. consumers lose and Japanese producers gain. B) U.S. tariff revenue equals the loss of U.S. consumer surplus. C) U.S. consumers lose and U.S. producers gain. D) U.S. car manufacturers gain revenue equal to the revenue lost by Japanese car manufacturers.
A tax for which the average tax rate decreases with income is defined as a
a. regressive tax. b. proportional tax. c. neutral tax. d. progressive tax.