Suppose that in a particular market, the demand curve is highly elastic, and the supply curve is highly inelastic. If a tax is imposed in this market, then the
a. buyers will bear a greater burden of the tax than the sellers.
b. sellers will bear a greater burden of the tax than the buyers.
c. buyers and sellers are likely to share the burden of the tax equally.
d. buyers and sellers will not share the burden equally, but it is impossible to determine who will bear the greater burden of the tax without more information.
b
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The demand for cars in a certain country is given by: D = 20,000 - P, where P is the price of a car. Supply by domestic car producers is: S = 5,000 + 0.5P. If this economy is open to trade, and the world price of a car is $6,000, how many cars will be imported?
A. 3,000 B. 2,000 C. 4,000 D. 6,000
Why might a developing country choose to peg the value of its currency to the dollar?
What will be an ideal response?
Refer to the above table. The marginal utility of the 7th movie for Michael is
A. 35 units of utility. B. 435 units of utility. C. 20 units of utility. D. 15 units of utility.
A permanent reduction in international trade barriers would
A. decrease aggregate demand. B. increase aggregate demand. C. increase long-run aggregate supply. D. decrease long-run aggregate supply.