The supply of sand is perfectly inelastic and the demand curve for sand is downward sloping. Hence, if a tax on sand is imposed,
A) sand buyers pay the entire tax.
B) sand sellers pay the entire tax.
C) the tax is split evenly between the buyers and sellers.
D) the government pays the entire tax.
E) the government collects no tax revenue because the supply is perfectly inelastic.
B
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Refer to Horizontal Merger. After the merger, producer's surplus is equal to
The following questions refer to the accompanying diagram, which shows the effects of a horizontal merger. Before the merger, the firm behaves competitively producing Q0 and charging P0. The merger lowers the firm's marginal cost and gives the firm enough market power to switch to the monopoly equilibrium.
a. area A + C + F.
b. area C + D + F + G.
c. area C + D + E - F - G.
d. area C + D.
Overexpansion can cause a perfectly competitive firm to ________.
A) produce at a quantity where the market price exceeds the firm's average total cost B) produce at a quantity where the marginal revenue exceeds the firm's average total cost C) produce at a quantity where the average total cost exceeds the market price D) earn economic profit
A technological production advance ______.
a. affects all segments of the economy equally b. may affect different economic segments differently c. creates growth in all economic segments d. influences only the segment for which it was developed
For this question, assume that investment spending depends only on the interest rate and no longer depends on output. Given this information, a reduction in the money supply
A) will cause investment to decrease. B) will cause investment to increase. C) may cause investment to increase or to decrease. D) will have no effect on output. E) will cause a reduction in output and have no effect on the interest rate.