The larger the number of firms in an industry and the less the extent of product differentiation, the greater will be the elasticity of the individual seller's demand curve.
Answer the following statement true (T) or false (F)
True
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Refer to Figure 11.4. Which diagram illustrates the effect of a decrease in the income tax rate?
A) A B) B C) C D) D
The Federal Reserve econometric model estimates that it takes __________ for crowding out to reduce the impact of a 1 percent increase in government spending, with the money supply held constant, to zero
A) 2 years B) 3 years C) 4 years D) Crowding out never reduces the impact to zero.
If the firms in a market are earning an economic profit, then, in the long run, the market ________ curve will shift to the ________.
A. supply; right B. demand; left C. supply; left D. demand; right
Which of the following is a negative economic effect that might occur if the government instituted a special tax on luxury vehicles?
a. More of the luxury vehicles would be on the road. b. Autoworkers making the vehicles might lose their jobs. c. Pollution from luxury vehicles would be lower. d. Money from the tax could be used for road repairs.