Explain why it is that how much consumers pay for an excise tax depends on how responsive they are to a given change in market price
What will be an ideal response?
If consumers are more responsive to a given change in market price, then the less they will bear the burden of an excise tax and the more producers will bear the burden of the tax. If consumers are more responsive to a change in the market price induced by an excise tax, then the market price will increase by a smaller amount than if consumers are very responsive to the change. The tax burden is effectively the difference between the market prices before and after the imposition of the tax.
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If the inflation that results from targeting unemployment becomes unacceptably high, low inflation can be restored
Lower inflation can be obtained by ________ the growth rate of aggregate demand, by ________ money growth, and by________ interest rates. A) lowering; accelerating; raising B) raising; slowing; raising C) lowering; slowing; raising D) lowering; accelerating; lowering E) lowering; slowing; lowering
To arrive at a logical determination of a firm’s optimum output, economists assume that the firm seeks to
a. maximize output. b. minimize cost. c. maximize profit or minimize loss. d. maximize price.
The level of capital per person would increase if
A) the average saving rate were higher. B) the output-to-capital ratio increased. C) the depreciation rate increased. D) Both A and B.
A horizontal merger involves
A) the joining of two firms at different stages of the production process. B) the separation of management from ownership. C) the joining of two firms selling similar products. D) the exchange of debt for stock.