If either the supply or the demand curve in a goods market is very elastic, a per-unit tax will end up not raising very much revenue.
Answer the following statement true (T) or false (F)
False
Rationale: The way a per-unit tax does not raise much revenue is that it causes a sharp decrease in output. But so long as one of the curves is relatively inelastic, that won't happen.
You might also like to view...
Everything else held constant, in the market for reserves, when the federal funds rate is 5%, lowering the discount rate from 5% to 4%
A) lowers the federal funds rate. B) raises the federal funds rate. C) has no effect on the federal funds rate. D) has an indeterminate effect on the federal funds rate.
The ultimate source of liquidity in a modern industrial economy is the
A) government Treasury. B) central bank. C) capital market. D) liquidity market.
If the apartment owner decides to fine both the roommates if the apartment is dirty, such that now if neither of them clean they each get a 5 utility loss, what would the new equilibrium be now?
a. John cleans, Joe doesn't b. Joe cleans, John doesn't c. Neither of them clean the apartment d. Both A&B
Choosing to produce at any point within a production possibilities frontier is:
A. inefficient, meaning the society would not be using all its available resources in their best possible uses. B. efficient, meaning the society would be using all its available resources in their best possible uses. C. unobtainable, meaning the society cannot produce that combination of goods. D. efficient but not attainable.