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27 Cards in this Set
- Front
- Back
When you specialize and trade according to comparative advantage, you compare what you can do relative to ______ and choose to produce the output that has the _________ opportunity cost.
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other things you could do; lowest
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Historically economists have agreed that free trade does all the following except:
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helps all citizens
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Trade enhances the economic well-being of a nation in the sense that
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trade results in an increase in total surplus.
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When a country allows trade and becomes an importer of a good,
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domestic producers become worse off and domestic consumers become better off.
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Workers displaced by trade eventually find jobs in
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the industries in which the country has a comparative advantage.
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When a country that imports a particular good imposes a tariff on that good,
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consumer surplus decreases and total surplus decreases in the market for that good.
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Refer to Fig. 9-15. For the saddle market, area B represents
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none of the above
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Refer to Fig. 9-14. When the country for which figure is drawn allows international trade in crude oil.
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producer surplus changes from C to C+C+D (or something like that)
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Fig. 16-1. The graph represents (tobacco industry graph)
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negative externality
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Fig. 10-1. The graph represents the tobacco industry. The industry represents
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optimal price higher.
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Which of the following represents a way that gov’t can help the private market to internalize or externalize
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Both a and b are correct.
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Negative externalities lead markets to produce
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greater than efficient output levels and positive externalities lead markets to produce smaller than efficient output levels.
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Suppose meat producers create a negative externality. What is the relationship between the equilibrium and the qua...
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the equilibrium quantity is greater than social quantity.
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Which of the following statements is not correct?
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Without gov’t intervention, the market will tend to undersupply.
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Which of the following policies is not an example of a command-and-control policy?
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none of the above is an example of a command-and-control policy
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Private solutions
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transaction costs.
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A command-and-control term
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gov’t regulation
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Which of the following NOT be considered private good?
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cable TV service
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The value and cost of goods are eased to determine when the goods are
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private goods.
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An overcrowded beach is an example of
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a Tragedy of the Commons
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Each of the following would be considered a common resource except
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national defense.
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A tax on gasoline often reduces road congestion because gasoline
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and driving are complements.
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Elephants are endangered, but cows are not because
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elephants are a common resource, cows are...privately owned.
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Which of the following goods is rival in consumption and excludable?
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a can of Coca-Cola.
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Private markets usually fail to provide lighthouses because
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ship captains have incentives to use light houses without paying.
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In a certain city, the gov’t is considering acquiring some land and turning it into a park (without any gates).
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all of the above are correct.
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When a good is excludable,
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people can be prevented from using the good.
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