1. Suppose country exhibits a comparative advantage in the production of pineapple. Assume that there is a world price for pineapple and that the domestic market has the usual downward sloping demand curve and upward sloping supply curve. Which of the following statements is true for this country?
   

   The country will import pineapple and producer surplus will increase relative to the no trade situation.

   The country will import pineapple and consumer surplus will increase relative to the no trade situation.

   The country will export pineapple and producer surplus will increase relative to the no trade situation.

   The country will export pineapple and consumer surplus will increase relative to the no trade situation.

   None of the above.

1 points

QUESTION 2

1. The demand for steel is given by the following: p=240-0.5Q. The marginal private cost of steel producers is given by the following: MPC=80+0.5*Q. Residents who live near a steel producer suffer from pollution by the firm: there is an (marginal) external cost of steel production, E=Q. The socially optimal level of steel production is:
   

   0.

   40.

   80.

   160.

   none of the above.

1 points

QUESTION 3

1. The demand for steel is given by the following: p=240-0.5Q. The marginal private cost of steel producers is given by the following: MPC=80+0.5*Q. Residents who live near a steel producer suffer from pollution by the firm: there is an (marginal) external cost of steel production, E=Q. If the market for steel is competitive the deadweight loss to society is equal to:
   

   0.

   1600.

   3200.

   6400.

   None of the above.

1 points

QUESTION 4

1. The demand for steel is given by the following: p=240-0.5Q. The marginal private cost of steel producers is given by the following: MPC=80+0.5*Q. Residents who live near a steel producer suffer from pollution by the firm: there is an (marginal) external cost of steel production, E=Q. A Pigouvian tax of _______ on steel production will ensure the efficient outcome is achieved.
   

   0.

   $40.

   $80.

   $160.

   None of the above.

1 points

QUESTION 5

1. Bob has a demand curve for public broadcasting (denoted by G) given by the following: G = 9- 0.5p.Similarly, Christine has a demand curve given by the following: G= 7 –p. Assume that the marginal cost of providing every hour of broadcasting is equal to 10. In a competitive equilibrium the number of hours supplied equals:
   

   0.

   4.

   5.

   7.

   None of the above.