The deadweight loss from a tax of $x per unit will be smallest in a market
a. in which demand is elastic and supply is inelastic.
b. in which demand is inelastic and supply is elastic.
c. in which demand is inelastic and supply is inelastic.
d. None of the above are correct; we need to know the value of x in order to determine the answer.
c
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Which of the following are equal to one another?
I. aggregate production II. aggregate expenditure III. aggregate income A) I equals II, but not III. B) I equals III, but not II. C) II equals III, but not I. D) I equals II equals III.
If we include consideration of potential effects of a proposed tax reduction and simplification on the labor supply, we would expect crowding out of investment and net exports brought about by the tax cut to be
A) increased as aggregate real income and output rise in the long run. B) unaffected by the shifting long-run aggregate supply curve. C) dependent upon the impact of this tax change on consumer disposable income. D) less than it would be without the supply-side effects.
An increase in total revenue will result if
A) demand is inelastic and price decreases. B) demand is elastic and price decreases. C) demand is elastic and price increases. D) demand is unitary elastic and price increases.
Attempts to reduce income inequality may lead to greater income inequality.
Answer the following statement true (T) or false (F)