If a $1 sales tax is imposed on the sale of a CD, and neither the demand nor the supply is perfectly elastic or perfectly inelastic, then the price of a CD paid by consumers will
A) increase by $1 and fewer CDs will be bought.
B) increase by less than $1 and fewer CDs will be bought.
C) not change and the same number of CDs will be bought.
D) increase by $1 and the same number of CDs will be bought.
E) increase by more than $1 and fewer CDs will be bought.
B
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A government, based upon its policy decisions, can determine the position and shape of the production possibilities frontier that the economy faces.
Answer the following statement true (T) or false (F)
The Herfindahl-Hirschman Index measures market concentration in an industry by summing the square of the percentage market shares for
A) the 4 largest firms. B) the 50 smallest firms. C) the 4 smallest firms. D) the 50 largest firms. E) all firms in the market.
If a mutual fund outperforms the market in one period, evidence suggests that this fund is
A) highly likely to consistently outperform the market in subsequent periods due to its superior investment strategy. B) likely to under-perform the market in subsequent periods to average its overall returns. C) not likely to consistently outperform the market in subsequent periods. D) not likely to outperform the market in any subsequent period.
Production indifference curves generally have a positive slope.
Answer the following statement true (T) or false (F)