A perfectly elastic supply curve is expressed graphically as a(n):
A. downward sloping line or curve.
B. upward sloping line or curve.
C. vertical line.
D. horizontal line.
Answer: D
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Suppose an excise tax of $0.75 is imposed on every pack of cigarettes sold and sellers are responsible for paying this tax. How would the imposition of the tax be illustrated in a graph?
A) The supply curve for cigarettes would shift to the left by more than $0.75. B) The supply curve for cigarettes would shift to the right by $0.75. C) The supply curve for cigarettes would shift to the left by $0.75. D) The supply curve for cigarettes would shift to the left by less than $0.75.
When using the traditional command-and-control approach to environmental regulation, the government attempts to
a. set a minimum requirement and then allows the firm to determine the most efficient method for achieving this requirement b. determine the most efficient method for different industries c. make allowances for differences across industries and between firms d. set engineering standards that are applicable to all situations and does not recognize unique circumstances e. set a maximum requirement and they allows the individual firm the latitude of choosing the most efficient method
Keynes believed
A. lowering wages could cure a depression. B. the interest rate was more important than the expected rate of profit in determining the level of investment in an economy. C. our economy always tends toward full employment. D. aggregate demand was more important than aggregate supply in the short run.
Tobin's q is equal to
A. the expected after-tax real interest rate. B. the ratio of capital's market value to its replacement cost. C. the stock market value of a firm. D. the ratio of capital's replacement cost to its market value.