Lowering the Tariff on Imported Ethanol

question 54

Multiple Choice

Lowering the tariff on imported ethanol

• A) increases domestic employment in the ethanol industry.
• B) increases the imports of ethanol.
• C) increases the domestic price of ethanol.
• D) has no effect unless the nation's trading partner also lowers its tariff on ethanol.

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Definitions:

Income

The accumulation of funds, characteristically on a habitual basis, through work or investing.

Von Neumann-Morgenstern

A theory of expected utility that describes how rational individuals choose among uncertain prospects, emphasizing the maximization of utility for decision-making under uncertainty.

Utility Function

A mathematical representation in economics that portrays an individual's preference ranking for different bundles of goods or outcomes.

Expected Utility

A theory in economics that calculates the utility expected from different choices to assess risk and make decisions.