By Reducing Available Supplies of a Product, an Export Embargo

question 191

True/False

By reducing available supplies of a product, an export embargo leads to falling prices in the target nation and increasing target-nation consumer surplus.

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Definitions:

Geegaws

Small, showy trinkets or novelty items.

Doodads

Informal term for small gadgets or devices, often novel or unnecessary; not a standard economic term.

Pareto Optimal

An economic state where resources are allocated in such a way that it is impossible to make any one individual better off without making at least one individual worse off.

Utility Functions

Functions that model the preference ranking of various combinations or bundles of goods and services by assigning a utility value based on the satisfaction obtained.