In a Production-Possibilities/indifference Curve Diagram Depicting the Movement of a Country

question 21

Multiple Choice

In a production-possibilities/indifference curve diagram depicting the movement of a Country from a situation of a uniform tariff against all trading partners to a situation of a Customs union with one trading partner,

• A) the country must necessarily move to a higher indifference curve after the formation Of the customs union.
• B) the country must necessarily move to a lower indifference curve after the formation of The customs union.
• C) home production of the country's export good will increase and home production of The country's import good will also increase after the formation of the customs Union.
• D) home production of the country's export good will increase and home production of The country's import good will decrease after the formation of the customs union.

Evaluate the effectiveness of various types of welfare programs.

Understand the concept of utility and its application in economics.

Interpret and assess tax systems, including negative income tax.

Explain the role of labor market economics in discussions about minimum wage and employment.

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Definitions:

Disposable Income

The financial capacity of households to spend and save, net of income taxes.

Savings

The part of earnings not used for purchasing goods or services, typically saved for investing or future needs.

Disposable Income

Indicates the sum of funds households can allocate towards expenditure and savings once income taxes have been deducted.

Disposable Income

Households' available economic resources for spending and saving post-tax.