(Consider This) A value-added tax (VAT):
A. is another name for a retail sales tax but is otherwise the same.
B. is like a sales tax but is only imposed on the difference between a firm's sales and its
purchases from other firms.
C. is like an income tax but is only imposed on the difference between a person's income and
his or her consumption.
D. only applies to imported goods.
Answer: B
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
Surplus value that is lost because something is keeping the market from functioning as well as it can is known as ________
Fill in the blank(s) with correct word
An external cost in the production of a good creates a difference between the
i. costs borne by the producer and the costs borne by society in general. ii. efficient quantity of output and the equilibrium quantity of output. iii. marginal social cost and the marginal private cost. A) i only B) iii only C) ii and iii D) i, ii, and iii E) i and iii
Refer to the figure above. What is the equilibrium quantity after the demand curve shifts to D2?
A) 20 units B) 30 units C) 35 units D) 50 units