Relating to the Economics in Practice on page 340: Europe has a carbon tax, and electricity producers are among the largest of the carbon producing firms. The carbon tax increased the price of electricity, and researchers found that the amount of the tax that was actually passed through to consumers reflected a ________ aggregate demand for electricity.
A. very inelastic
B. unit elastic
C. perfectly inelastic
D. slightly elastic
Answer: A
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The demand for labor is described as a derived demand because
A) it is derived from the demand for products that use labor in the production process. B) it is derived by workers seeking to earn income to fund the consumption of goods and services. C) it is derived from government institutions which rely on labor markets for the purpose of raising tax revenue. D) it is derived by producers seeking to make profits by starting new businesses.
Each member of a cartel
A) agrees to reduce output lower than it would if it were acting independently. B) is operating illegally in every country in which it is doing business. C) sets output independently of the impact on other members. D) makes less money than it otherwise would.
The price of a new textbook increased by 25 percent and the price of a used textbook increased by 30 percent. What happened to the relative price of the new textbook?
A) It increased by 5 percent. B) It increased, but we can't tell by how much without more information. C) It decreased by 5 percent. D) It decreased, but we can't tell by how much without more information.
ARCH and GARCH models are estimated using the
A) OLS estimation method. B) the method of maximum likelihood. C) DOLS estimation method. D) VAR specification.