A tax imposed by a state or local government on retail sales of most products is
A) an excise tax. B) a sales tax.
C) a consumption tax. D) a social service tax.
B
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Answer the following statement(s) true (T) or false (F)
1. Producer's surplus is equal to total revenue minus consumer's surplus. 2. The efficiency criterion is normative in nature. 3. According to the efficiency criterion, when a policy creates both winners and losers, it will be preferred to the status quo as long as the winners' gains outweigh the losers' losses. 4. A given level of output is efficient if no more social gain can be obtained from changing the output level. 5. A $5 per unit sales tax is bad for consumers because it implies that the total amount (price plus tax) that they must pay increases by $5.
The interest rate the Federal Reserve charges a bank when it borrows reserves from the Fed is called the
A) federal funds rate. B) prime rate. C) market interest rate. D) discount rate. E) borrowing rate.
Which of the following holds true at the chosen level of output in the long run for firms in a perfectly competitive market?
A. P > MC B. P = minimum AVC C. MR = MC D. MR > MC
Refer to the game between James and Theodore depicted in Figure 12.2. Which of the following is true?
A. If James chooses Up, Theodore's best response is to choose Left.
B. If James chooses Down, Theodore's best response is to choose Left.
C. If Theodore chooses Left, James's best response is to choose Down.
D. If Theodore chooses Right, James's best response is to choose Up.