The supporters of a proposal to increase marginal taxes on those earning over $100,000 a year say this change would generate $500 million in new tax revenues. A supply-side economist would argue that the actual revenue raised will be
A. less than $500 million because some people will respond by working less.
B. more than $500 million because interest rates will also be affected.
C. more than $500 million, because lower income people will work harder when they perceive the tax system to be fairer.
D. exactly $500 million because there are no offsetting factors to a tax increase.
Answer: A
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The figure above shows a firm in monopolistic competition. If all firms in the industry have the demand and cost curves illustrated in the figure, then in the long run
A) some firms will have exited the industry. B) some firms will have entered the industry. C) firms will have neither entered nor exited the industry. D) we cannot tell if firms will either have entered or exited the industry.
The conclusion arrived at from a kinked-demand oligopoly model is that:
a. oligopoly firms cannot maximize their profits. b. oligopoly firms should keep prices at their current level. c. all oligopoly firms should raise prices. d. all oligopoly firms should lower prices. e. oligopoly market structure will lead to lower prices than more competitive industries.
The software industry has traits in common with monopoly markets.
Answer the following statement true (T) or false (F)
Life-cycle wealth refers to the
a. income earned by an individual b. value of stock holdings by an individual c. monetary assets held by an individual d. non-money assets held by individuals e. amount of assets received through inheritance