How a sales tax is divided between buyers and sellers is determined by
A) the government's choice of whom to tax.
B) who the law says must pay the tax.
C) the elasticities of supply and demand.
D) the revenue needs of government.
C
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"Price gouging," or significant price spikes, are typical caused by
A) a significant increase in consumer demand. B) a significant increase in supplier greed. C) government attempts to impose price caps. D) no systematic relationship between supply and demand.
An economy produces at point a on the PPF shown in the above figure. A drought reduces the amount of wheat produced and the economy produces at point b. The opportunity cost of a unit of wheat ________
A) remains the same B) increases C) is impossible to calculate without numbers on the axes D) decreases
Price bubble occurs when
A) price of an asset soars far above "fundamentals" like corporate earning or household income. B) people can no longer afford to purchase an asset. C) economy enters recessionary period. D) economy experiences prolonged and slow recovery.
Which of the following is correct?
a. Unemployment insurance raises structural unemployment because it reduces the job search efforts of the unemployed. b. Most economists are skeptical of the value of unemployment insurance primarily because they believe that it results in a poorer match between workers and jobs. c. Studies show that when the unemployed become ineligible for benefits, the probability of their finding a job rises markedly. d. All of the above are correct.