Question

QUESTION 13 The tragedy of the commons can o sometimes be averted in large groups of unrelabed people sometimes be averted in smal groups of related people o never be averted only be averted by command and control QUESTION 14 The tragedy of the commons is more likely to apply to oil and gas products e forests and fah e chickens and cows o microchips and lapeeps QUESTION 15 For a given set of demand and supply curves, the horizontal location of the tax wedge depends on whether the tax is imposed on buyers or sellers the amount of the tax whether the tax is a short-run or long-run tax the number of sellers QUESTION 16 if the world price of cotton is less that the price that would occur domestically without trade, then a country wi e decrease ts demand for cotton and increase its demand for comon substiunes e increase its demand for cotton and decrease its demand for cotton substunes import cotton export cotton QUESTION 17 A trade quota is ea restriction on the quantity of goods that can be impprted a tax on imports o a tax on exports o the restriction of trade through regulations on domestic producers QUESTION 18 A tariff on a good when the world price is lower than the domestic price leads to e tariff revenues that will be lower than under free trade e domestic imports that will be higher than under free trade e lower domestic consumption of the good than under free trade o lower domestic production of the good than under free trade

Answer 1

13) Tragedy of commons can be sometimes averted in small groups of related people where people see its in their common interest to not over-exploit the resources. Even though command and control can also avert the problem, it is not the only way. Therefore, option b) is correct.

14) Tragedy of commons is specifically observed for common resources which are rival but non-excludable in nature. Forests and fish falls under this category. Therefore, option b) is correct.

15)  The tax wedge gives the difference between what consumers pay and what producers receive after tax from a transaction. It does not matter whether the tax is on producers or consumers. The amount of tax is important.  Therefore, option b) is correct.

16) Given that the world price is lower, it makes sense for the country to import cotton at a lower price than to produce it. Therefore, option c) is correct.

17) Restriction on quantity of goods imported is trade quota. Therefore, option a) is correct.

18) A tariff is passed to the consumers in terms of higher prices. This will lead to lower domestic consumption. Therefore, option c) is correct.