If the supply curve is perfectly inelastic and the demand curve is a downward sloping straight line, what is the effect of a consumer ad valorem tax on equilibrium price and quantity?
A) Price remains unchanged and quantity increases.
B) Price decreases and quantity increases.
C) Price decreases and quantity remains unchanged.
D) Price and quantity decrease.
C
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An example of money is
A) a checking account balance. B) a dollar bill. C) a traveler's check. D) all of the above.
Which of the following is an example of rent seeking behavior?
A) Recent increases in cigarette taxes faced little opposition from voters, many of whom were rationally ignorant with respect to the tax. B) U.S. sugar firms convinced Congress to impose a quota on imports of sugar. C) Amazon introduced the Kindle to compete with Sony's Digital Reader. Amazon was motivated by the desire to earn profits from the Kindle but also increased the choice of digital music players available to consumers. D) Apple earned large profits from the development and sale of the iPhone.
Experiencing the winner's curse in a common-value auction means
a. You lost money in the auction b. You bid too low c. Your estimate of the value of the good being auctioned was too optimistic d. Your estimate of the value of the good being auctioned was too pessimistic
The theory of comparative advantage suggests that nations should produce a good if they:
a. have the lowest opportunity cost. b. have the lowest wages. c. have the most resources. d. can produce more of the good than any other nation.