Multiple Choice - 2 points each. Maximum of 20 points (meaning you can get 1 wro
ID: 1142198 • Letter: M
Question
Multiple Choice - 2 points each. Maximum of 20 points (meaning you can get 1 wrong get a perfect score and still 1. Tax incidence refers to: A) B) C) D) who writes the check to the government. who really pays the tax. the deadweight loss from the tax. the total revenue that the government collects from the tax. 2. In a single year, the Netherlands can raise 100 tons of beef or produce 1,000 boxes of tulips. In the same growing season, Belgium can raise 50 tons of beef or produce 750 boxes of tulips. From this information, we know that: A) the Netherlands has a comparative advantage in raising beef. B) the Netherlands has a comparative advantage in raising tulips. C) Belgium has a comparative advantage in raising beef. D) Belgium has an absolute advantage in raising beef 3. The term autarky refers to a country that: A) trades goods and services based upon the principle of comparative advantage. B) trades goods and services based upon the principle of absolute advantage C) trades goods and services based upon the principle of Ricardian advantage. D) does not trade with other countries. 4. An urbanized country has 100 million workers living on 100 square miles of land. A country that is principally rural has 1 million workers living on 10 square miles of land. From this information we know that the urbanized country is relative to the rural country A) land-abundant B) labor-abundant C) land-intensive D) labor-intensive 5. An economy moves from autarky to free international and the economy as a whole consumer surplus producer surplus A) rises; rises; gains B) rises; falls; gains C) falls; rises; gains D) rises; falls; losesExplanation / Answer
1. Option B. Who really pays the tax
Explanation:- it divides the tax between producer and consumers when goods elastic or inelastic.
2. Option A. Netherland has a comparative advantage in in raising beef
Explanation:- opputunity cost of Netherland in beef is less than Belgium. OC of Netherland in beef is 10 box tulip and Belgium OC in beef is 15 tulip. Hence, less OC has comparative advantage
3. Option D. Does not trade with other countries.
Explanation:- it means country is closed economy. It doesn't engage in any international trade.
4. Option B. Labor abundant
Explanation:- a country is a labor abundant if it's relative endowment of labor is large compared to other country.
5. Option C. rises; falls; gains
Explanation:- the domestic price level decreases, consumers get more benefit and quantity consumed will increase, country gains from it.
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