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Revenue and tariffs

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1. If a nation is capable of producing more computers than another nation, given the same factors of production, it is said to have which of the following capabilities?

Comparative advantage
Basis for terms of trade
Absolute advantage
Labor theory of value

2. Which of the following is NOT a trade barrier?

Import quota
Tariff
Trade-zone
Subsidies

3. The loss in consumer and producer surplus that is not government revenue become:

Total expenditure
Protective effect
Welfare loss
Redistributive effect

4. If the government imposes a tariff on an imported good, what will happen to government revenue?

Revenue will necessarily decrease, because tariffs are always inefficient.
Revenue must increase, because tariffs increase the demand for goods.
Revenue will rise, because tariffs cause welfare losses that are partly turned into revenue.
No revenue will be generated, because a tariff causes all welfare lost to become deadweight loss.

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Solution discusses Revenue and tariffs

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1. If a nation is capable of producing more computers than another nation, given the same factors of production, it is said to have which of the following capabilities?

Comparative advantage
Basis for ...

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