According to the Laffer curve, when the tax rate is 100 percent, tax revenue will be:
A. 0.
B. at the maximum value.
C. the same as it would be at a 50 percent tax rate.
D. greater than it would be at a 50 percent tax rate.
Answer: A
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A person's real income will increase by 3% if her nominal income increases by
A. 5% while the price index falls by 2%. B. 5% while the price index rises by 2%. C. 2% while the price index falls by 5%. D. 2% while the price index rises by 5%.
The clearing corporation's main role in the futures market is to:
A. provide the underlying assets so the contracts can be created. B. set the market price of the contract. C. act as the counterparty to both sides of the transaction, thereby guaranteeing payment. D. all of the above.
According to the figure shown, if Nike charges a high price, then Adidas should:
A. leave the market. B. give an ultimatum. C. charge a high price. D. charge a low price.
If the demand curve facing a firm is perfectly elastic, then:
A. it can increase its total revenue by lowering the price of its product. B. its marginal revenue will equal price. C. its marginal revenue schedule decreases twice as fast as the demand curve. D. its marginal revenue schedule will decrease at an increasing rate.