The most important difference between unit excise taxes and ad valorem excise taxes is _____
a. the unit tax will change in response to a change in the price of the taxed good, while the ad valorem tax will not
b. the unit tax will not change in response to a change in the price of the taxed good, while the ad valorem tax will
c. the unit tax increases in response to a change in the price of the taxed good, while the ad valorem tax will decline
d. the unit tax declines in response to a change in the price of the taxed good, while the ad valorem tax will increase
b
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If an economy is represented by a point along its production possibilities curve
A) it can produce more of one product only if it produces less of another product. B) it cannot produce more of one product unless it stops producing the other product entirely. C) it can produce more of one product even if it does not produce less of another product. D) it cannot possibly produce more of one product, even if it produces less of another product.
Continuing with the same vacation-insurance company from the preceding question, what vacation-day price(s) would be acceptable to both the family and the insurance company?
a. 3 or 4 b. 3,4 or 5 c. 3,4,5 or 6 d. 3,4,5,6 or 7
Wage differentials exist in the long run because
a. labor markets are perfectly competitive b. all jobs are equally attractive to all workers c. the prices of goods vary by market d. there are too many workers in the labor force e. not all workers are equally qualified to perform every job
Why is it inefficient for an economy to be inside the production possibilities frontier?