A decrease in household income for a good that is considered normal would
A. cause a movement along the demand curve to a (higher price, lower quantity) point.
B. move its demand curve to the left.
C. cause a movement along the demand curve to a (lower price, higher quantity) point.
D. move its demand curve to the right.
Answer: B
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Excess burden calculations typically assume many other distortions.
A. True B. False C. Uncertain
Consumers value the product-specific services for a new smartphone at $20 and the marginal cost to the retailers for providing the product-specific services is $20. If the retailers provide the product-specific services, which of the following is true?
A) The shift in the market demand will equal the shift in the market supply. B) The shift in the market demand will be exactly double the shift in the market supply. C) The shift in the market supply will exceed the shift in the market demand. D) The shift in the market demand will exceed the shift in the market supply.
If the government wanted a tax to raise a great deal of revenue but not burden producers much, it would want to tax an industry with
a. elastic supply and demand curves. b. inelastic supply and demand curves. c. inelastic supply and elastic demand. d. elastic supply and inelastic demand.
Which of the following statements concerning tariffs is NOT true?
A) A tariff results in a deadweight loss. B) A tariff creates revenue for the government. C) A tariff decreases international trade. D) A tariff leaves the price of imports unchanged.