ECON 260 6 If Mexico imposes a tariff on lumber, then which of the following is
ID: 1104387 • Letter: E
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ECON 260 6 If Mexico imposes a tariff on lumber, then which of the following is NOT likely to occur? a. Mexican imports of foreign lumber decrease b. total surplus in the Mexican lumber market increases c producer surplus in the Mexican lumber market increases d. the domestic price of the good increases above the world price by the amount of tariff imposed Figure 2: Price per Saddle Domestic Supply P2 C Tariff World Price Ps G/ Domestic Demand 0 0a 04 Quantity of Saddles d.C+D+E+F dC+D+E+F dC D+E+F dC+D+E+F 7. Refer to Figure #2. With the tariff, what are the areas that represents the loss of consumer surplus? c. D+F c. D+F c. D+F b. E a C. 8. Refer to Figure W2.With the tarif, what are the areas that represents the tariff revense to the government? 9. Refer to Figure 2. With the tariff, what are the areas that represents the dead weight loss to the country? 10 Refer to Figuren with the tarwhat are the area(s) hatr present(s) the gain of the prod ers plus? 11. The term market failure refers to a market that fails to allocate resources efficiendly. A market failure can NOI be caused by b. E b. E a. too much of competition. b.externalities. c. market power d. lack of property rights 12. An externality is the impact of one person's actions on the well-being of a bystander, which of the following is NOT an example of an extemality? a bad weather causes more hardship on farmers b. cigarette smoke that permeates an entire restaurant c. a beautiful flower garden outside of the local post office d. a flu shot that prevents a student from transmiting the virus to her rooenmate. society as a whole. Thus, all remedics for externalities share the goal of a increasing the allocation of resources c decreasing the allocation of resources b. moving the allocation of resources toward the socially optimal equilibrium. d. moving the allocation of resources toward the market equilibriam RMUNNICHAExplanation / Answer
6. B. TOTAL SURPLUS IN THE MEXICAN JUMBER MARKET INCREASES.
7.a. C
8.b. E
9.c. D+F
10.a. C.
11.too much of competition
12. C
13. B
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