Jin likes to buy licorice candy. She has just learned that a new tax is going to be assessed on candy. If Jin understands how taxes influence pricing, what is her most likely reaction?
a. She is upset because she knows she will pay more for licorice.
b. She is happy because she knows she will pay less for licorice.
c. She does not care because she knows this will not affect licorice prices.
d. She is happy because she will have more consumer surplus on licorice.
a. She is upset because she knows she will pay more for licorice.
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Which of the following is an example of an "implicit cost"?
A) Interest that could have been earned on retained earnings used by the firm to finance expansion. B) The payment of rent by the firm for the building in which it is housed. C) The interest payment made by the firm for funds borrowed from a bank. D) The payment of wages by the firm.
The above figure depicts the Edgeworth box for two individuals, Al and Bruce. Considering only the labeled points, point c is a possible equilibrium
A) only if it is the endowment. B) only if point a is the endowment. C) if either point a or b is the endowment. D) only if point d is the endowment.
In the AD/AS diagram, what type of unemployment is shown by how close the economy is to the potential or full-employment level of GDP?
a. Natural b. Structural c. Cyclical d. Full
The CPI differs from the GDP deflator in that
a. the CPI is a price index, while the GDP deflator is an inflation index. b. substitution bias is not a problem with the CPI, but it is a problem with the GDP deflator. c. increases in the prices of foreign produced goods that are sold to U.S. consumers show up in the CPI but not in the GDP deflator. d. increases in the prices of domestically produced goods that are sold to the U.S. government show up in the CPI but not in the GDP deflator.