A government wishing to maximize its tax revenues should
A) always assess the highest possible tax rate.
B) always assess the lowest possible tax rate.
C) determine the highest possible tax rate and then back it down by exactly 4 percentage points.
D) push tax rates up to the point where revenues peak, but raise the tax rate no farther.
Answer: D
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Oligopolies exist and do not attract new rivals because
A) of barriers to entry. B) there can be no product differentiation. C) of competition. D) the firms keep profits and prices so low that no rivals are attracted.
If your neighbors remove the weeds in their yard and this activity prevents weed seeds from blowing into your yard, the benefit you receive is a public good.
Answer the following statement true (T) or false (F)
Which of the following statements is FALSE about the demand curve?
A) An increase in demand shifts the demand curve to the left, closer to the price axis. B) When only the price of a good changes, there is movement along the demand curve but no change in demand. C) A change in demand is graphically shown by shifting the entire demand curve. D) When demand decreases, there is a drop in the quantity demanded at each price.
In the "cost of capital channel" of monetary policy, a lower interest rate __________ spending
A) raises consumption B) raises investment C) lowers consumption D) lowers investment