In the large country case, when a tariff is imposed, the country:
a. sees a terms-of-trade gain.
b. is able to reduce world price of the imported good.
c. is going to experience an increase in consumer surplus.
d. sees a terms-of-trade gain and is able to reduce world price of the imported good.
Ans: d. sees a terms-of-trade gain and is able to reduce world price of the imported good.
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Consider the following output-choice game for two firms:
Firm 2 - low Firm 2 - medium Firm 2 - high Firm 1 - low 150, 150 100, 160 75, 100 Firm 1 - medium 160, 100 110, 110 50, 75 Firm 1 - high 100, 75 75, 50 0, 0 What is the outcome of the game if both firms use maximin strategies? A) Both firms choose low output levels. B) Both firms choose medium output levels. C) There is no clear outcome under a maximin strategy for both firms. D) There are two possible maximin outcomes --- Firm 1 chooses medium and Firm 2 chooses low, or Firm 1 chooses low and Firm 2 chooses medium.
Big-push economists argue that an interlocking, balanced set of infrastructure and development investments can only be initiated, financed, and managed by
a. government b. private sector entrepreneurs c. foreign multinationals d. the World Bank e. the International Monetary Fund