Figure 7-8
For a price increase from $10 to $11, the price elasticity of the demand curve depicted in is
a.
highly inelastic.
b.
relatively inelastic.
c.
approximately equal to -1.
d.
approximately equal to -2.
d
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Refer to the table above. If investment expenditure falls by $10,000 in the next year, ________, all other variables remaining unchanged
A) gross domestic product will fall to $467,000 B) gross domestic product will fall by $10,000 C) gross domestic product will increase by $10,000 D) gross domestic product will increase to $500,000
Transfer payments are not part of government expenditure on goods and services because transfer payments
A) are not predictable given the nature of their appropriation and allocation. B) do not represent the purchase of a final good or service. C) are not always spent on goods produced in the U.S. D) The premise of the question is incorrect because transfer payments are part of government purchases of goods and services.
Answer the following statement(s) true (T) or false (F)
1. Chemical use is associated with a production externality. 2. In the presence of a negative consumption externality, the MSB lies below the MPB. 3. To internalize the consumption externality of pesticide use, a product charge can be implemented as a unit tax. 4. If a unit tax is used to internalize the consumption externality of chemical use, it achieves efficiency if it is set equal to the MSB at the efficient output level.
If Christopher earns $80,000 in taxable income and pays $20,000 in taxes, his average tax rate is 20 percent
a. True b. False Indicate whether the statement is true or false