Let supply be given by P = 5Q and demand by P = 19 - 2Q. Suppose we now place a tax of 5 per unit of output on the seller. The new equilibrium price is:
A. 10
B. 7
C. 15
D. 2
Answer: C
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If marginal product is greater than average product, then
A) marginal product could either be increasing or decreasing. B) average product must be decreasing. C) marginal product must be decreasing. D) marginal product must be increasing.
Assume that the expectation of a recession next year causes business investments and household consumption to fall, as well as the financing to support it. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises and nominal value of the domestic currency falls. b. The real risk-free interest rate falls and nominal value of the domestic currency remains the same. c. The real risk-free interest rate rises and nominal value of the domestic currency remains the same. d. The real risk-free interest rate rises and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.
Keynes's analysis of the Great Depression led to which of the following recommendations regarding government policy?
A. An annually balanced budget B. A decrease in government spending C. An increase in government spending D. An increase in taxes
The main function of a platform firm is to
A. deal with the government on behalf of sellers. B. create entry barriers for an industry on behalf of existing firms. C. perform collective bargaining with sellers on behalf of buyers. D. link producers with consumers.