Suppose there are three identical vases available to be purchased. Buyer 1 is willing to pay Rs30 for one, buyer 2 is willing to pay Rs25 for one, and buyer 3 is willing to pay Rs20 for one. If the price is Rs25, how many vases will be sold and what is the value of consumer surplus in this market ?

A. three vases will be sold, and consumer surplus is rs80
B. one vase will be sold, and consumer surplus is rs5.
C. one vase will be sold, and consumer surplus is rs30.
D. three vases will be sold, and consumer surplus is rs0.

Total surplus is the area_______________?

A. Above the supply curve and below the price
B. Below the demand curve and above the price
C. Below the demand curve and above the supply curve
D. Below the supply curve and above the price

An increase in the price of a good along a stationary supply curve______________?

A. Increase producer surplus
B. Does all the things describe in these answers
C. Decrease producer surplus
D. Improves market equity

In general, if a benevolent social planner wanted to maximize the total benefits received by buyers and sellers in a market, the planner should?

A. Choose a price below the market equilibrium price
B. Allow the market to seek equilibrium on its own.
C. Choose any price the planner wants because the losses to the sellers (buyers) from any change in price are exactly offset by the gains to the buyers (sellers).
D. Choose a price above the market equilibrium price

Suppose that Pakistan imposes a tariff on ballpoint pens of 25 rupees per pen plus 12 percent of the pen’s value, this is an example of a (an) ?

A. Specific tariff
B. Ad valorem tariff
C. Compound tariff
D. Effective tariff

Suppose that the nominal tariff rate on finished computers is 12 percent and that the weighted average of the nominal tariff rates on the inputs used in producing computers is 18 percent. Thus, the effective rate of protection for the computer industry must ?

A. Be less than 12 percent and can be negative
B. Be less than 12 percent but must be greater than zero
C. Equal 6 percent
D. Exceed 30 percent

Concerning a government’s trade policy, all the following generally apply except ?

A. Economic downturn and recession generally result in greater protectionism
B. Because domestic consumers outnumber domestic producer’s policy markers usually enact free-trade policies to satisfy the consumer majority:
C. When domestic exporting companies are organized, policy tends to favor freer trade
D. Policy tends to favor freer trade in countries whose imports are inputs into critical industries

Concerning import tariffs of the United States empirical studies tend to conclude that these tariffs are ?

A. Progressive and thus bear down on the wealthy
B. Regressive and thus bear down on the poor
C. Proportional and thus bear down on all consumers in the same manner
D. Deflationary and thus result in reductions in the price of imports

With free trade the total value of imports would equal ?

A. $100,000 units
B. $400,000 units
C. $600,000 units
D. $800,000 units

Suppose there is no tariff on imported inputs and the ratio of the value of imported inputs the value of the final product is 0.5 If the nominal tariff rate on the final product is 10 percent, the effective tariff rate equals ?

A. 5 percent
B. 10 percent
C. 15 percent
D. 20 percent