A deadweight loss is a consequence of a tax on a good because the tax
a. induces the government to increase its expenditures.
b. induces buyers to consume less, and sellers to produce less.
c. increases the equilibrium price in the market.
d. imposes a loss on buyers that is greater than the loss to sellers.
b
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On any given day we know a salesman can earn $0 with a 30% probability, $100 with a 20% probability or $300 with 40% probability. His expected earnings equal
A) $0. B) $140. C) $300. D) It cannot be determined from the available information.
Changes in the price level affect which components of aggregate demand?
a. only consumption and investment b. only consumption and net exports c. only investment d. consumption, investment, and net exports
You operate a shop that repairs TVs and VCRs. The going wage rate in a competitive market for skilled repair people is $18 per hour. Given the current demand for your services, the marginal revenue product of your repair people is $28 per hour. If you were to employ one more hour of a repair person's services you would
A. increase your profit by $28. B. increase your profit by $18. C. increase your profit by $10. D. not increase your profit at all.
Economic stagnation coupled with high inflation is commonly called:
A. stagflation. B. inflationary stagnation. C. stagnatory growth. D. inflagnation.