The graph shown demonstrates a tax on buyers. Once the tax has been imposed, the sellers produce ________ units and receive ________ for each one sold.
A. 6; $34
B. 9; $18
C. 9; $30
D. 6; $22
Answer: D
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Positive analysis:
A. involves the formulation and testing of hypotheses. B. involves value judgments concerning the desirability of alternative outcomes. C. weighs the fairness of a policy. D. examines if the outcome is desirable.
If a $10 billion decrease in lump-sum taxes increases equilibrium GDP by $40 billion, then:
A. the multiplier is 4. B. the MPC for this economy is .8. C. the MPC for this economy is .6. D. the multiplier is 3.
Assume that the current price of a market basket of goods is $2,500 and the base year price of the same market basket is $1,340. The price index is
A) 53.6. B) 40.0. C) 138.3. D) 186.6.
To determine the equilibrium price level and equilibrium level of real GDP, the aggregate demand and aggregate supply must:
A. be considered separately. B. intersect. C. be disregarded. D. be considered as a multiplier.