If low-income households spend a larger share of their income on food than do high-income households, then a tax on food is:
A. a way to redistribute from the wealthy to the poor.
B. a regressive tax.
C. a proportional tax.
D. a progressive tax.
Answer: B
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An excess benefit from corrective taxation arises because the tax revenues can be spent on compensation
a. True b. False
Which of the following statements accurately describes a difference between a firm that is a monopolist and one that is a competitive price taker?
a. Marginal revenue and market price are equal for the competitive price taker but not for the monopolist. b. The monopolist does not always produce the output that equates marginal cost and marginal revenue; the competitive price taker does. c. The monopolist charges the highest price possible; the competitive price taker charges a price equal to its per-unit cost. d. A monopolist can earn economic profit in the short run; a competitive price taker cannot.
Which of the following is a property of an isoquant?
a. It is concave to the origin. b. Its slope is given by the ratio of the marginal products, for example, (marginal product of capital) รท (marginal product of labor), where capital and labor are measured on the Y and X-axes respectively. c. It gives the lowest-cost way of producing a certain level of output. d. Isoquants cannot intersect each other.
If the supply curve of labor facing a firm is upward sloping, this implies that
a. the firm is unable to hire additional workers b. to hire additional workers, the firm must increase the wage rate c. any number of workers can be hired at a fixed wage d. additional workers can be hired at lower wage rates e. the demand curve for the firm's good must be horizontal