The table illustrates the market for Internet service. What is the market price of Internet service? If the government taxes Internet service $15 a month, what is the price the buyer pays?
What is the price the seller rece-ives? Does the buyer or seller pay more of the tax?
The market price of an Internet service is $20 a month because that is the price at which the quantity demanded equals the quantity supplied. A figure is helpful to answer the questions about the tax incidence. If the government imposes a tax of $15 a month on Internet services
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What effect does a price increase have on producers' total revenue?
What will be an ideal response?
A decrease in demand will cause a surplus at the original market price
a. True b. False Indicate whether the statement is true or false
If you were a supply-side economist, you would argue that
a. reductions in government spending cut basic public goods, such as roads which hurts the private sector, particularly private investment b. increases in government spending stimulates the economy as a whole which would include the private sector c. increases in government spending cause private sector investment to fall because the government competes with the private sector for investment funds and this leadsto higher interest rates d. reductions in government spending cause private sector investment to fall because the government raises interest rates by borrowing e. increases in private consumption is good for the private sector of the economy and for the government as well because people with more income pay more tax
Maximum employment and moderate long-term interest rates are best achieved with
A) price stability. B) high and variable inflation rates. C) high real interest rates. D) high and stable inflation rates. E) high short-term interest rates.