When a single tax is imposed, the excess burden is proportional to the compensated elasticity of demand and to the square of the tax rate.
A. True
B. False
C. Uncertain
A. True
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A new country has been established on the moon and created a currency called cheesybits. Which of the following represents demand for cheesybits?
A. Luna lives on the moon and wants to travel to visit relatives in Japan. B. Moonbeam Incorporated, the largest company on the moon, sells building products for houses on the moon. C. Moonrock corporation needs new mining equipment that it buys from a manufacturer in Russia. D. Han is visiting the moon and wants to eat at his favorite restaurant, the Moonglow Bar and Grill.
Arguments in favor of a laissez-faire policy concerning government's role in the economy include the
a. need for price controls b. possibility of creative destruction c. gains from trade d. contestable nature of markets e. lack of countervailing power among the economic blocs in the economy
One of the factors contributing to the existence of frictional unemployment is
a. automation. b. labor union strikes. c. occupational mobility. d. falling real GDP.
Specialization in production is important primarily because it:
A. results in greater total output. B. allows society to avoid the coincidence-of-wants problem. C. allows society to trade by barter. D. allows society to have fewer capital goods.