Suppose the market demand curve is perfectly elastic in an increasing-cost industry. If an output tax of t per unit is imposed on all producers of the good, what happens to the market equilibrium outcome?
A) The price paid by buyers increases and output declines
B) The price paid by buyers does not change and output decrease
C) The price paid by buyers and output increase
D) The price paid by buyers and output decrease
B
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Which of the following would be studied by macroeconomists?
A. Inflation in developing countries. B. The effect of government subsidies on sugar prices. C. The impact of the minimum wage on families below the poverty level. D. The effect of rent controls on housing prices in New York City.
Which of the following would cause an increase in the exchange value of the U.S. dollar?
a. A decrease in the amount of foreign debt purchased by U.S. citizens b. An increase in U.S. exports c. Increased demand by foreigners to buy U.S. government securities d. all of the above
If equilibrium is present in the foreign exchange market and a nation is experiencing a trade surplus,
a. the nation must be experiencing a net capital inflow. b. the nation must be experiencing a net capital outflow. c. the nation's inflation rate must increase. d. the nation's interest rate must increase.
Paternalism describes a situation in which:
A. people are likely to make bad decisions over and over. B. the government passes laws that require citizens to change their behavior. C. there is no role for firms to influence people's behavior. D. people are led to make better decisions (as judged by an outside decision maker).