To fully understand how taxes affect economic well-being, we must compare the

The benefit that government receives from a tax is measured by

Taxes cause deadweight losses because they

Refer to Figure 1.  Suppose the government imposes a tax of P’ - P’’’.  The producer surplus after the tax is measured by the area

Figure 2
Suppose that the government imposes a tax of P3 - P1.

Refer to Figure 2. The benefit to the government is measured by

Refer to Figure 2. The loss in total welfare that results from the tax is represented by area

With which of the Ten Principles of Economics is the study of international trade most closely connected?

Which of the following tools and concepts is useful in the analysis of international trade?

What is the fundamental basis for trade among nations?

Assume, for the U.S., that the domestic price of beef without international trade is lower than the world price of beef. This suggests that, in the production of beef,

Figure 3. On the diagram below, Q represents the quantity of computers and P represents the price of computers.

Refer to Figure 3.  When the country for which the figure is drawn allows international trade in computers,

Aquilonia has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing incense, exporting steel, and neither importing nor exporting rugs. Which groups in Aquilonia are better off as a result of the new free-trade policy?

After a certain nation changed its policy from one that banned international trade in wheat to one that allowed international trade in wheat, the nation began importing wheat.  As a result, total surplus in the wheat market increased by $10 million.  Which of the following changes could have occurred as well?

Figure 4.  On the diagram below, Q represents the quantity of peaches and P represents the price of peaches.  The domestic country is Isoland.

Refer to Figure 4.  If Isoland allows international trade and the world price of peaches is $5, then

The “unfair-competition” argument might be cited by an American who believes that

Which of the following statements about GDP is correct?

Gross domestic product is defined as

Until recently, George lived in a home that was newly constructed in 2005.  In 2005, he paid $200,000 for the brand new house.  He sold the house in 2006 for $225,000.  Which of the following statements is correct regarding the sale of the house?

Which of the following examples of production of goods and services would be included in U.S. GDP?

Which of the following examples of household spending is categorized as investment rather than consumption?

Which of the following components or subcomponents of GDP can be either positive or negative?

In the economy of Wrexington in 2008, consumption was $1000, exports were $100, government purchases were $450, imports were $150, and investment was $350.  What was Wrexington’s GDP in 2008?

The GDP deflator is the ratio of

In the economy of Wrexington in 2008, real GDP was $5 trillion and the GDP deflator was 200.  What was Wrexington’s nominal GDP in 2008?

Suppose an economy produces only eggs and ham.  In 2005, 100 dozen eggs are sold at $3 per dozen and 50 pounds of ham are sold at $4 per pound.  In 2004, the base year, eggs sold at $1.50 per dozen and ham sold at $5 per pound.  For 2005,

Many things that society values, such as good health, high-quality education, enjoyable recreation opportunities, and desirable moral attributes of the population, are not measured as part of GDP.  It follows that

The information below was reported by the World Bank.  On the basis of this information, which list below contains the correct ordering of GDP per person from highest to lowest?

Country	Nominal GDP in 2000	Population in 2000
Kenya	$10,400 million	30.1 million
Tanzania	$9,000 million	33.7 million
Zimbabwe	$7,200 million	12.6 million

International data on GDP and socioeconomic variables

The price index was 150 in the first year, 160 in the second year, and 175 in the third year.  The inflation rate was about

Table 1

The table below pertains to Wrexington, an economy in which the typical consumer’s basket consists of 20 pounds of meat and 10 toys.

Year	Price of Meat	Price of a Toy
2004	$3 per pound	$2
2005	$1 per pound	$7
2006	$4 per pound	$5

Refer to Table 1.  The cost of the basket in 2006 was

In the basket of goods that is used to compute the consumer price index, the three largest categories of consumer spending are

The substitution bias in the consumer price index refers to the

Laura bought word-processing software in 2005 for $50.  Laura's twin brother, Laurence, bought an upgrade of the same software in 2006 for $50.  To which problem in the construction of the CPI is this situation most relevant?

Which of these events would cause the consumer price index to overstate the increase in the cost of living?

Two alternative measures of the overall level of prices are

In 1970, Professor Plum earned $12,000; in 1980, he earned $24,000; and in 1990, he earned $36,000.  If the CPI was 40 in 1970, 70 in 1980, and 130 in 1990, then in real terms, Professor Plum's salary was highest in

Which of the following statements is correct about the relationship between the nominal interest rate and the real interest rate?

If the nominal interest rate is 6 percent and the rate of inflation is 2 percent, then the real interest rate is

Suppose that over the past year, the real interest rate was 5 percent and the inflation rate was 3 percent.  It follows that

Which of the following is correct?