Use the following graph for a competitive market to answer the question below.
Assume the government imposes a $3 tax on buyers, which results in a shift of the demand curve from D1 to D2. The amount of the tax paid by the consumer is
A. $8.
B. $1.
C. $3.
D. $2.
Answer: B
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Economics is the social science that studies
A) the real reasons people buy goods and services. B) the psychology of individuals and businesses. C) whether a nation has enough natural resources. D) how people make choices to cope with scarcity. E) how choices made in the social interest could eliminate scarcity.
If a drug company creates a new drug designed to treat common seasonal allergies is approved by the U.S. Food and Drug Association (FDA), which means the drug can be marketed and sold in the U.S., the approval by the FDA is an example of ________.
A) a trademark B) screening C) self-revelation D) a certification
Society might argue that there are cases in which it is appropriate to resist price increases in situations where scarcity is serious. Included would be the case of
A. unrestrained monopoly that would otherwise succeed in extracting funds from the public. B. taxes imposed on products capriciously and inappropriately. C. rising prices falling so heavily on the poor that rationing becomes preferable. D. All of the responses are correct.
Which of the following conditions is characteristic of a monopolistically competitive firm in short-run equilibrium?
a. P = AR b. MR = MC c. P > MC d. All of the above are correct.