A tax on cigarettes:
A. increases total surplus.
B. increases efficiency in the market.
C. like any tax, will always reduce surplus and efficiency in markets.
D. will increase both total surplus and efficiency in the market.
Answer: D
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Automatic fiscal policy ________
A. requires an action of the government B. is weak unless the government cuts its outlays to reduce the deficit C. operates as the economy moves along its business cycle D. reduces the deficit as the economy goes into recession
The majority of economists favor open capital flows
Indicate whether the statement is true or false
Refer to the payoff matrix below. If each cell has a probability of occurrence of 0.25, what are Cruise R Us' expected profits?
Cruise R Us and Cruise the World compete in the cruise line industry. Each firm needs to determine if they are going to offer special cruise packages with special rates or not offer the specials. The above payoff matrix shows the firms' net economic profit for each set of strategies.
A) $5 B) $8 C) $3 D) $9
An economy's production function has the constant-returns-to-scale property. If the economy's labor force doubled and all other inputs stayed the same, then real GDP would
a. stay the same. b. increase by exactly 50 percent. c. increase by exactly 100 percent. d. increase, but not necessarily by either 50 percent or 100 percent.