When can Japan and Mexico gain from trading two goods, for example, cars and textiles?

a.When Japan can only produce cars and Mexico can only produce textiles.

b.When Japan can produce both goods, but can only produce textiles at a high cost, and Mexico can also produce both products, but can only produce cars at a substantially high price.

c.When Japan is better at producing both goods and Mexico is worse at producing both goods.

d.Japan and Mexico could gain from trading cars and textiles under all of the above conditions.

Based on the graph titled Free Trade, Efficiency, and Welfare,see my presentation, andassumingthat the terms of international trade are one car per one textile, if Mexico specializes in cars, the Consumption Possibilities Curve will:

a.Start at the specialization point of cars.

b.Mexico can obtain more textiles by reducing production of cars instead of attempting to export cars.

c.The CPC will travel through the inner area of the PPC

d.All of the above

Which of the following statements correctly describes the relationship between the size of the dead weight loss, (DWL),and the amount of tax revenue as the size of the tax rate increases from a small tax rate to a medium rate to a large tax?

a.Both the size of the DWL and tax revenue increase.

b.The size of the DWL increases, but tax revenue decreases.

c.The size of the DWL increases,but tax revenue first increases, then decreases.

d.Both the size of the DWL and tax revenue decrease.

The tariffs imposed by the Trump administration, coupled with retaliatory tariffs applied by trading partners, increasingly seems to have the following consequences:

a.To diminish the high growth rate of the U.S. economy during 2018.

b.To reduce consumers' welfare.

c.To induce companies that use as an input the newly taxed good, to relocate abroad.

d.All of the above

Based on the graph on the impact of subsidies, indicate the area that measures the inefficiencyof the subsidy: (Go to Supply, Demand and Welfarepresentation and find the slide titled: Subsidies, Welfare and Dead Weight Costs)

a.QoQsLJ

b.JLK

c.QoQsKM

d.JMK

The reason why drug interdiction increases the revenues of drug dealers is that:

a.Demand for drugs is elastic.

b.Demand is inelastic.

c.Supply is elastic

d.Supply is inelastic

Opponents of free trade often want the U.S. to prohibit the import of goods made in overseas factories that pay wages below the U.S. minimum wage. Banning such products is likely to:

a.Cause these factories to pay the U.S. minimum wage.

b.Increase the rate of technological innovation in poor-countries so that they can afford to pay higher salaries.

c.Increase poverty in lowly developed countries and benefit U.S. firms which compete with these imports.

d.Harm U.S. firms which compete with these imports.

Which of the following groups is the most likely to effectively, (in practice), pay corporate income taxes?

a.The taxed corporation.

b.Workers of the firm.

c.Suppliers of input goods to the company.

d.The community where the corporation is located.