When the total surplus lost as a result of a tax is less than the amount of tax revenue collected by the government there is a deadweight loss
a. True
b. False
Indicate whether the statement is true or false
False
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Beth can paint 2 T-shirts in an hour while her brother can paint 1 T-shirt in an hour. However, her brother can paint 2 walls in an hour while she can paint only one. Who should specialize in which activity and why?
What will be an ideal response?
The Herfindahl-Hirschman Index is used to ________
A) measure the price elasticity of demand faced by a firm B) estimate the degree of competition in an industry C) measure the price elasticity of market supply in an industry D) estimate the profit earned by firms in an industry
A monopoly:
a. faces the market demand curve which is downward sloping. b. has a marginal revenue curve which slopes downward and lies below its demand curve. c. will maximize profits by producing an output level where MR = MC. d. all of these.
For which product is the income elasticity of demand most likely to be negative?
A. bread B. computer software C. used clothing D. apps for iPads