A few years ago, the city of Seattle, Washington, considered imposing a specific tax on all espresso-based coffee drinks sold in the city. The extra tax revenue generated would have been used to fund after-school programs for low-income children
The coffee-house owners (firms) agreed that this would be a good program to fund, but they argued that the tax would sharply reduce their sales volume and they would pay most of the tax burden. This claim is true if: A) the demand for espresso-based coffee is more inelastic than supply.
B) the demand for espresso-based coffee is more elastic than supply.
C) there are no close substitutes for espresso-based coffee drinks.
D) espresso-based coffee drinks can be produced at constant marginal cost.
B
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Indicate whether the statement is true or false
The ability to produce the same quantity of a good or service using fewer units of labor is known as
A) competitive dominance. B) productive dominance. C) comparative advantage. D) absolute advantage.
If marijuana were legalized, it is likely that there would be an increase in the demand for marijuana. If demand for marijuana is inelastic and the supply of marijuana is perfectly elastic, this will result in
a. higher prices and higher total revenue from marijuana sales. b. higher prices but lower total revenue from marijuana sales. c. the same price and higher total revenue from marijuana sales. d. the same price but lower total revenue from marijuana sales.
Within the framework of the aggregate expenditures model, which of the following is true?
A. When spending on goods and services exceeds the level business decision makers anticipated, inventories will rise. B. Equilibrium will always occur at the full-employment level of output. C. A nation's imports will decline as the nation's disposable income increases. D. When spending on goods and services exceeds the level of aggregate output, inventories will fall.