Answer:
changes in private savings offset any changes in the government deficit
Explanation:
Ricardian equivalence means that private saving changes offset any changes in the government budget. Therefore, if the deficit increases by 30, private saving also increases by 30 but the trade deficit and the budget deficit will not change.
In case of the Ricardian equivalence, economic agents are assumed to be perfectly rational. According to them, higher taxes are required to repay the debt in case of an increase in deficit-financed government spending.
Answer: adverse selection
Explanation:
From the question, we are told that an
insurance company is likely to attract customers like Clancy who want to purchase insurance because he knows better that the company that he is more likely to make a claim on a policy.
The idea above is called adverse selection. This is a situation whereby either the seller or the buyer believes that he or she has more information than the other person regarding a particular product.
In economics, marginal cost is the additional expenditure or cost you incur when you buy another more quantity of the product. When Allison bought the <span>1minus−color application, she spent a total of $130.
$35 + $95 = $130
When she upgraded to 3minus-color application, her cost now increased to
$175 + $40 = $215
Now, as mentioned, marginal cost is the additional cost incurred when buying one more quantity of the same product. Therefore, marginal cost = </span>Δcost/Δquantity. Thus,
Marginal Cost = ($215-$130)/(3-1)
Marginal Cost = $42.5
The marginal cost is $42.5 per color application.
Answer:
The reason the government is often more responsive to producer interests than to consumer interests when it comes to the imposition of tariffs and quotas is:
it wants to ensure that producers are protected from foreign competition.
Explanation:
Producers face foreign competitive threats. Consumers do not face such competition. Therefore, the government will often consider the producers' interests more than the consumers' interests when imposing trade tariffs and quotas. If local industries are not protected from their foreign competitors, the unemployment rate will increase and the economy will be flooded with cheap and low quality goods from other countries. In that way, the US will be subsidizing the foreign producers indirectly.
