If a government tax has as its purpose the raising of revenue, it would be best to place the tax on a product which:
a. is a non-essential.
b. has a highly elastic demand.
c. has many good substitutes.
d. has a highly inelastic demand.
e. has a unit elastic demand curve.
d
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Refer to Figure 4-6. What area represents the deadweight loss at the equilibrium price of P1?
A) G + H B) C + E C) C + E + H D) There is no deadweight loss at the price of P1.
In the shareholder wealth maximization model, the value of a firm's stock is equal to the present value of all expected future ____ discounted at the stockholders' required rate of return
a. profits (cash flows) b. revenues c. outlays d. costs e. investments
Cartels are inherently unstable
a. True b. False
Suppose it takes Paul 3 hours to bake a cake and 2 hours to mow the lawn, and suppose it takes Tom 2 hours to bake a cake and 1 hour to mow the lawn. Which of the following statements is correct?
A. Paul has the absolute advantage in mowing the lawn. B. Paul has the absolute advantage in baking cakes. C. Paul has the comparative advantage in mowing the lawn. D. Paul has the comparative advantage in baking cakes.