Part II (20 points) Answer the required question and any th…
Part II (20 points) Answer the required question and any three of the optional questions below. Be sure to provide a detailed explanation of your answers — no explanation, no credit. Required Question (#51) Observers sometimes contend that when producers experience a tax or other cost increase, they simply will pass this increase on to consumers in the form of higher prices, thereby experiencing none of the burden themselves. What role might price elasticity of demand play in determining whether or not this contention is valid. Explain carefully in two or three sentences. (8) Optional Questions (52, 53, 54–answer 3 of the 4 below) Note: If you answer more than three questions among the ones that follow, only the first three answered will be graded. Be sure to use the number below (1, 2, 3, or 4) to indicate which question you are answering. In international trade, Comparative Advantage simply means that every country should do (or produce) that which it does (or producers) best. True or false? Explain. (4) Do protective tariffs, imposed with the idea of protecting certain industries, actually save jobs in the economy overall? Explain. (4) A strong American dollar is beneficial for everyone in America. True or false? Explain. (4) What is the important difference between marginal utility theory (cardinal utility) and indifference curve theory (ordinal utility)? Does one have more potential for practical application and, if so, why? (4)
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