Which of the following is true?
i. Comparative advantage drives international trade.
ii. Compared to a no-trade situation, imports make domestic producers better off.
iii. Tariffs lower the domestic price of imported goods.
A) Only i B) Only ii C) Only iii D) i and ii E) i and iii
A
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The price of a new textbook increases from $75 to $90 while the price of used copies of the textbook increases from $50 to $65. Other things equal, we would expect to observe
A) the quantity demanded of the used textbook to increase while the quantity demanded of the new textbook to fall. B) the quantity demanded of both to fall. C) the demand for the new textbook to increase while the demand for the used textbook to decrease. D) the quantity demanded of the used textbook to decrease and the quantity demanded of the new textbook to increase.
Producer surplus measures the value between the actual selling price and the profit-maximization price
a. True b. False Indicate whether the statement is true or false