When the market mechanism is allowed to operate freely, prices will determine
A. The mix of output to be produced, the resources to be used in the production process, and for whom the output is produced.
B. Only for whom the output is produced and the mix of output to be produced.
C. Only the resources to be used in the production process and for whom the output is produced.
D. Only the mix of output to be produced and the resources to be used in the production process.
Answer: A
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The fact that high-income earners tend to earn a higher percentage of their incomes from rent and dividends, in contrast to low-income earners, make the payroll taxes
A. proportional. B. a flat tax. C. more progressive. D. more regressive.
The tax wedge in the figure above is equal to ________ per hour, which creates an after-tax real wage rate of ________ per hour and employment of ________ billion hours per year
A) $10; $35; 250 B) $10; $35; 200 C) $15; $20; 200 D) $5; $35; 200 E) $15; $30; 250
Transfer prices
a. are an accounting device to allocate the costs and revenues of intermediate products across divisions b. increase the 'profits' of the profit center producing the intermediate product when they rise c. decrease the 'profits' of the profit center using the intermediate product when they rise d. all of the above
If the value of the price elasticity of demand is 0.2, this means that
a. a 20 percent decrease in price causes a 1 percent increase in quantity demanded b. a 0.2 percent decrease in price causes a 1 percent increase in quantity demanded c. a 5 percent decrease in price causes a 1 percent increase in quantity demanded d. a 0.2 percent decrease in price causes a 0.2 percent increase in quantity demanded e. a 100 percent decrease in price causes a 200 percent increase in quantity demanded