Section I - Multiple Choice (1 Viewer)

[Aindan]

1) c
2) a,
3) c
4) d
5) a
6) b
7) c
8) a
9) d
10) c
11) b,
12) d
13) c,
14) b,
15) b
16) b
17) c,
18) d
19) b
20) c

Those are the answers.

Everything there is right except 17, which I'm pretty confident the answer is D. Also lol this is pretty sad but for 20. I think i put D even though i knew the answer was C D:

 

[y510920]

Everything there is right except 17, which I'm pretty confident the answer is D. Also lol this is pretty sad but for 20. I think i put D even though i knew the answer was C D:

how is 17 D dude.

(400-100)x10 - (300-200)x15 = $1500

 

[kev-is-red]

Everything there is right except 17, which I'm pretty confident the answer is D. Also lol this is pretty sad but for 20. I think i put D even though i knew the answer was C D:

I was sure 17 was D during the exam, but the top student in my class and my teacher are adamant the answer is C.

 

[weirdguy99]

how is 17 D dude.

(400-100)x10 - (300-200)x15 = $1500

Nope, $500 of that is government revenue ($5 x 100). Therefore, they actually lose $2000.

 

[michaeljennings]

how is 17 D dude.

(400-100)x10 - (300-200)x15 = $1500

I put C as well but I think its D because the government gets $500 from the tariff as revenue so the answer is a loss of $2000

 

[silence--]

^yeah, i think that is right :L still hoping its $1500 somehow, haha.
argh.
hate this mc >_>

 

[slyhunter]

Answer's D.

 

[weirdguy99]

^yeah, i think that is right :L still hoping its $1500 somehow, haha.
argh.
hate this mc >_>

Maybe, just maybe, revenue is before tax. So it actually *is* $1500, but it changes to $2000 after tax as net income... I don't do business studies so I'm not exactly sure

 

[friend177]

I was sure 17 was D during the exam, but the top student in my class and my teacher are adamant the answer is C.

I have faith in your teacher, please be C

 

[y510920]

but that $500 government revenue is obtained through import tax, which is why the price needed to be higher in order to make up the profit. its not like they push the price up to decrease their revenue and THEN pay another 500 dollars to the government.

 

[kev-is-red]

I have faith in your teacher, please be C

This is her fourth year at the school, the last three years, 69%, 46% and 60% of economics students at our school got band 6. I doubt she is wrong

 

[friend177]

Maybe, just maybe, revenue is before tax. So it actually *is* $1500, but it changes to $2000 after tax as net income... I don't do business studies so I'm not exactly sure

Its C.

 

[y510920]

Its C.

hi five btw i think 13 is B even i put C........

an increase in consumption from 110 to 200 means it increase by 90....
an increase in 90 in C sees an increase in income by 150.....

so.....150/90 we get 5/3 so for every dollar increase in consumption there will be 5/3 increase in income.....

when investment increase by 40 (200 to 240)....there will be a 40x5/3 increase in income + plus original 300....367Bn.
i have no idea, i put 400bn, and the smart kids in my school + here also put 400, but when i try to justify myself it seems its more like B not C.....

 

[weirdguy99]

hi five

I put C as well, but I can agree with it being D.

If it really is C, I'm going to bloody scream due to joy.

 

[rawrence]

The answer is D, you don't times it by 15, you times it by the world price!

 

[friend177]

hi five btw i think 13 is B even i put C........

hi five!

 

[funkygirl59]

Its C.

i'm actually pretty sure it's d.
i put c as well in the exam
but just remember: they often ask us to calculate the reveune to the government (which is that 500 square in there i.e. 100 x the tariff (i.e. 5) --> so the producer only ends up getting world price x quantity: why would they get the revenue from the tariff? the protections not about helping the producer!

 

[kev-is-red]

hi five btw i think 13 is B even i put C........

13 is definitely C.

40 / (1 - 0.6) = 100

300 + 100 = 400

 

[Aindan]

but that $500 government revenue is obtained through import tax, which is why the price needed to be higher in order to make up the profit. its not like they push the price up to decrease their revenue and THEN pay another 500 dollars to the government.

This is wrong. The tariff raises the price of the good unconditionally, the producer does not obtain the revenue then pay it off, it is an additional price levied onto the cost of the good.
Before the tariff, the revenue generated is 300 x $10 = $3000. I think we can all agree on that.
After the imposition of the tariff, $5 GOES TO THE GOVERNMENT AND $10 GOES TO THE FOREIGN PRODUCER (This is the same price recieved for each shirt as before). Therefore the revenue recieved using total outlay = $10 (even though the shirt is sold at $15, foreign producers only gain $10 because the additional $5 is levied onto the imported good as it enters the domestic market) x 100 = $1000.
Therefore loss = $2000.

 

[mnm2envy]

The answer was c, 3000-1500= $1500