Question

True or False and Explain. I expect a paragraph answer.

A 3/5 is a satisfactory answer. There is one mark for True or False and four marks for your explanation. Please note I will not post up an answer key to these statements because in life there is no answer key.

4. Gains from trade are equally distributed between consumers and producers.

5. A tariff will create more domestic jobs.

6. The price of a rare gem is higher than the price a bottle of water so citizens value gems more than water.

Answer 1

False, gains acquired from trade is equally divided between the producers of the commodity. The gains are created from the money which customers pay by purchasing that commodity. Either loss or profit from the trade of that commodity is divided amongst the producers of that good.
5- True, tariff increases government revenue which is used as benefit of the economy. As result of it, the domestic production increases and the price of the products increases as a consequence of which the customer spending and domestic employment increases.
6- True, the price of a real gem is higher than the price of a bottle of water, so the citizens value gems more than water. It is so because of the scarcity of resources, the real gem is a scarce resource in the economy and a bottle of water is available in large quantity so the citizens can easily purchase it. There is a very simple concept that the price of those commodities who are rarely available is always higher than that which are easily available.