The above figure shows a graph of a market for pizzas in a large town. At a price of $7, what is the amount of excess demand?
A) 0; there is excess supply at $7.
B) 20 units
C) 30 units
D) 10 units
C
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Many economists believe a general sales tax (particularly on items such as food) takes a larger proportion of income from low-income households than from high-income households. If this is true, a general sales tax is a
a. regressive tax. b. proportional tax. c. neutral tax. d. progressive tax.
When some countries export products at prices below the cost of production, or the price charged in the domestic market it is called ________
a. cream-skimming b. import substitution c. monopoly pricing d. dumping
The reason that stagflation tends to follow an inflationary gap is that
A. output tends to fall even as prices continue to rise as part of the self-correcting mechanism. B. government officials tend to overact in controlling inflation. C. businesses try to increase profits by raising prices and increasing output. D. workers accept pay cuts to maintain employment.
A direct relationship is expressed graphically as a:
A. positively sloped line or curve. B. negatively sloped line or curve. C. horizontal line. D. vertical line.