According to the graph shown, if the economy is operating in autarky and decides to open trade with a tariff, the impact on domestic demand is they will:
This graph demonstrates the domestic demand and supply for a good, as well as a tariff and the world price for that good.
A. decrease consumption from 1500 to 1150.
B. increase consumption from 815 to 1500.
C. increase consumption from 815 to 1150.
D. decrease consumption from 1500 to 815.
C. increase consumption from 815 to 1150.
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A tax equal to the external cost on firms that emit pollutants would: a. provide firms with the incentive to increase the level of activity creating the pollution
b. provide firms with the incentive to decrease the level of activity creating the pollution. c. provide firms with little incentive to search for less environmentally damaging production methods. d. not reduce pollution levels at all.
Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Which of the following is true?
A. Country B should produce tablets and Country A should produce iPods, and they could benefit from trade. B. Country B should produce iPods and Country A should produce tablets, and they could benefit from trade. C. Neither country can benefit from trade since no comparative advantage exists. D. Because Country B has the absolute advantage in producing tablets, they should specialize in the production of tablets.