Suppose the demand for peaches from South Carolina is perfectly elastic. If the supply curve is upward sloping and a tax is imposed on peaches from South Carolina, then
A) peach sellers pay all of the tax.
B) peach buyers pay all of the tax.
C) peach buyers and sellers evenly split the tax.
D) the government does not collect any revenue from the tax.
E) the tax does not change the equilibrium quantity of peaches.
A
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Diminishing returns occurs because
A) consumers don't buy enough of the products produced. B) one of the inputs in the production process is fixed. C) not enough people have jobs. D) two people have not satisfied their self-interests.
In the case of a negative externality, the social marginal cost will:
a. exceed the private marginal cost. b. be equal to private marginal cost. c. fall short of private marginal cost. d. bear no significant relation to private marginal cost.
If the marginal propensity to consume is 0.60, the marginal propensity to save will be: a. greater than 0.60. b. equal to 0.40
c. equal to 0.60. d. equal to 0.
A monopolist finds the price-output combination that maximizes its profits by
A. finding the combination for which the difference between marginal revenue and marginal cost is the greatest. B. equating price and marginal cost. C. equating total revenue and total cost. D. equating marginal revenue and marginal cost.