Why do many economists advocate a consumption tax rather than an income tax?
The current income tax means that income is taxed at the same rate if it is used for current consumption or if it is saved. A consumption tax would encourage saving, because individuals would be taxed only when they spend. Income saved would be exempt from tax until it was ultimately used for consumption. Thus a consumption tax would encourage saving.
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If a fast food restaurant gives senior citizens a 10% discount on food every day, this is an example of price discrimination. If they only give the discount on Tuesdays, it is not price discrimination.
Answer the following statement true (T) or false (F)
Which of the following is important in determining the extent of competition in an industry?
A) the minimum level of short-run average total costs of production B) the minimum efficient scale of production relative to market demand C) whether or not the industry product is differentiated or standardized D) only the level of market demand for the industry's product
Which of the following elements are involved in monopolistic competition?
a. difficult entry, many sellers, identical products; significant brand loyalty b. easy entry, many sellers, product differentiation; significant brand loyalty c. easy entry, few sellers, identical products; little brand loyalty d. difficult entry; few sellers; product differentiation; little brand loyalty
The monopoly can shift the demand for its product rightward by
A) accommodating entry. B) advertising new uses for its product. C) moving along the learning curve. D) All of the above.