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Suppose the market shown in the graph below is initially in equilibrium with price at P1. Then, the government mandates that price can't fall below P2. Which one of the following statements is potentially false? Price Supply P2 P1 Demand Quantity O With the government mandate, producer surplus decreases. O With government mandate, consumer surplus decreases. O The government mandate will reduce the quantity sold. O With the government mandate, the deadweight loss is areas (D+E). O With the government mandate, social welfare decreases. According to the theory of comparative advantage, the main advantage of trade is that... O countries can achieve a point beyond their own production possibilities frontier. O countries will become more equal over time. O countries can obtain goods that they can't produce domestically. O the pace of technological progress will increase. O environmental impacts will decline. Which one of the following statement is false? O Specialization and trade allow countries to take advantage of economies of scale. O The value of a country's exports can exceed the value of its GDP. O A tariff is an example of a protectionist trade policy. O According to the theory of comparative advantage, a country should specialize in what it can produce at the lowest per-unit cost. O Expanded trade is likely to result in more "exported pollution."

Suppose the market shown in the graph below is initially in equilibrium with price at P1. Then, the government mandates that price can't fall below P2. Which one of the following statements is potentially false? Price Supply P2 P1 Demand Quantity O With the government mandate, producer surplus decreases. O With government mandate, consumer surplus decreases. O The government mandate will reduce the quantity sold. O With the government mandate, the deadweight loss is areas (D+E). O With the government mandate, social welfare decreases. According to the theory of comparative advantage, the main advantage of trade is that... O countries can achieve a point beyond their own production possibilities frontier. O countries will become more equal over time. O countries can obtain goods that they can't produce domestically. O the pace of technological progress will increase. O environmental impacts will decline. Which one of the following statement is false? O Specialization and trade allow countries to take advantage of economies of scale. O The value of a country's exports can exceed the value of its GDP. O A tariff is an example of a protectionist trade policy. O According to the theory of comparative advantage, a country should specialize in what it can produce at the lowest per-unit cost. O Expanded trade is likely to result in more "exported pollution."

Principles of Macroeconomics (MindTap Course List)
Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781305971509
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter6: Supply, Demand, And Government Policies
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Suppose the market shown in the graph below is initially in equilibrium with price at P1. Then, the government mandates that price can't fall below P2. Which one of the following statements is potentially false? Price Supply A P2 B P1 C Demand Quantity O With the government mandate, producer surplus decreases. O With the government mandate, consumer surplus decreases. O The government mandate will reduce the quantity sold. O With the government mandate, the deadweight loss is areas (D+E). O With the government mandate, social welfare decreases. According to the theory of comparative advantage, the main advantage of trade is that .. O countries can achieve a point beyond their own production possibilities frontier. O countries will become more equal over time. O countries can obtain goods that they can't produce domestically. O the pace of technological progress will increase. O environmental impacts will decline. Which one of the following statement is false? O Specialization and trade allow countries to take advantage of economies of scale. O The value of a country's exports can exceed the value of its GDP. O A tariff is an example of a protectionist trade policy. O According to the theory of comparative advantage, a country should specialize in what it can produce at the lowest per-unit cost. O Expanded trade is likely to result in more "exported pollution."
Transcribed Image Text:Suppose the market shown in the graph below is initially in equilibrium with price at P1. Then, the government mandates that price can't fall below P2. Which one of the following statements is potentially false? Price Supply A P2 B P1 C Demand Quantity O With the government mandate, producer surplus decreases. O With the government mandate, consumer surplus decreases. O The government mandate will reduce the quantity sold. O With the government mandate, the deadweight loss is areas (D+E). O With the government mandate, social welfare decreases. According to the theory of comparative advantage, the main advantage of trade is that .. O countries can achieve a point beyond their own production possibilities frontier. O countries will become more equal over time. O countries can obtain goods that they can't produce domestically. O the pace of technological progress will increase. O environmental impacts will decline. Which one of the following statement is false? O Specialization and trade allow countries to take advantage of economies of scale. O The value of a country's exports can exceed the value of its GDP. O A tariff is an example of a protectionist trade policy. O According to the theory of comparative advantage, a country should specialize in what it can produce at the lowest per-unit cost. O Expanded trade is likely to result in more "exported pollution."
The graph below shows two countries' production possibilities frontiers for rice and wheat production. Suppose both countries specialize in producing the crop in which they have a comparative advantage. Based on the theory, which one of the following allocations after trading is a potential outcome for Country X? PPFS for Countries X and Y 200 200 400 tons of rice O 200 tons of wheat and 200 tons of rice O 100 tons of wheat and 150 tons of rice O 150 tons of wheat and 50 tons of rice O 250 tons of wheat and O tons of rice O O tons of wheat and 400 tons of rice tons of wheat
Transcribed Image Text:The graph below shows two countries' production possibilities frontiers for rice and wheat production. Suppose both countries specialize in producing the crop in which they have a comparative advantage. Based on the theory, which one of the following allocations after trading is a potential outcome for Country X? PPFS for Countries X and Y 200 200 400 tons of rice O 200 tons of wheat and 200 tons of rice O 100 tons of wheat and 150 tons of rice O 150 tons of wheat and 50 tons of rice O 250 tons of wheat and O tons of rice O O tons of wheat and 400 tons of rice tons of wheat
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