Tariffs
A tariff is this kind of government-imposed fee on imports.
What is a tax?
A quota limits this aspect of imports into a country.
What is the quantity?
This term describes trade between countries without government restrictions.
What is free trade?
A positive or negative change in the ability of a firm to produce a given level of output with a given or set quantity of inputs.
What is a technological change?
Total cost
What is the cost of all the inputs a firm uses in production?
When tariffs are imposed, this group benefits while consumers pay higher prices.
Who are domestic producers?
A quota helps domestic producers but reduces this for consumers.
What is consumer surplus?
A situation where a country doesn’t trade at all.
What is autarky?
The principle states, at some point, adding more variable inputs, such as labor, to the same amount of a fixed input, such as capital, will cause the marginal product of the variable input to decline.
What is the law of diminishing marginal returns?
This is when all costs are variable.
What is the long run?
The main purpose of most tariffs is to reduce this kind of competition.
What is foreign competition?
Despite their inefficiency, quotas persist largely because the benefits are concentrated while these are spread out.
What are the costs to consumers (or society)?
The ability to produce a good at a lower opportunity cost than another country.
What is comparative advantage?
The formula for average product of labor.
What is the total output produced by a firm divided by the quantity of workers?
The marginal cost curve cuts through this point on both the ATC and AVC curves.
What is the minimum?
This economic concept describes the total loss of efficiency caused by tariffs or quotas.
What is deadweight loss?
Areas C and D. (Slide 5)
What is the deadweight loss?
This ratio describes how much of one good a country trades for another.
What are the terms of trade?
If the next worker produces more output (marginally) than the average, then the Average Product will ____.
What is rise?
Curve D. (Slide 6)
What is the AFC?
This represents the tariff revenue the government receives. (Slide 4)
What is T?
This represents the consumer surplus that becomes producer surplus after the quota is imposed.
What is A?
The use of trade barriers to protect domestic firms is known by this term.
What is protectionism?
In the short run, marginal product of labor increases at first and then falls because _____.
What is there are fewer opportunities for division of labor and specialization when fewer workers are hired?
If a firm produces 40 units of output and incurs a total cost of $1,500 and a fixed cost of $500, this is the firm's average fixed cost of production if it expands output to 45 units. (Rounded to the nearest cent)
What is $11.11?