When a large nation imposes a tariff, which of the following is NOT a cost incurred?
a. deadweight efficiency loss
b. reduced consumer surplus
c. deterioration of terms of trade for the trading partners
d. falling government revenues for the nation imposing the tariff
Ans: d. falling government revenues for the nation imposing the tariff
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A market transaction causes an externality if someone
A. directly involved in the transaction receives uncompensated benefits or costs from it. B. not directly involved in the transaction receives uncompensated benefits or costs from it. C. directly involved in the transaction seeks legal assistance to ensure that the transaction is carried out. D. not directly involved in the transaction interferes in it by imposing regulations or product standards.
Short-run costs that depend on the level of output are
A. total fixed cost only. B. total costs only. C. total variable costs only. D. both total variable costs and total costs.