If the tax on gasoline increases from $2 to $4 per gallon, the deadweight loss from the tax increases by a factor of
a. one-half.
b. two.
c. four.
d. six.
c
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Scientific evidence suggests that consumption of foods rich in fiber lowers cholesterol. As a result, the demand for bran increases at every price by 5,000 bushels and the supply curve for bran is perfectly price elastic. The quantity of bran consumed will
A. not change. B. change unless the demand curve is perfectly inelastic. C. rise by exactly 5,000 bushels. D. not rise by exactly 5,000 bushels unless the demand curve is perfectly inelastic.
A corporate bond sold in 2000 with a face value of $10,000, a $100 coupon, and a maturity date in 2010
A. will pay the bondholder $100 a year every year from 2000 to 2010 and will also pay the bondholder $9,000 in 2010. B. will pay the bondholder $100 a year every year from 2000 to 2010 and will also pay the bondholder $10,000 in 2010. C. requires the bondholder to pay $100 a year every year from 2000 to 2010 and will pay the bondholder $10,000 in 2010. D. requires the bondholder to pay $100 in 2000 only and will pay the bondholder $10,000 in 2010.
At a discount rate of 6 percent, what is the net present value of an investment project expected to yield $1,000 per year (to be received at year end) for the next three years?
a. $3,000 b. $2,829 c. $2,673 d. There is insufficient information to determine whether the project should be undertaken.
Citizens in the U.S. are not concerned with the financial well-being of their bank due to which of the following?
A. The stability of the economy B. The FDIC C. Government regulation of the banking sector D. The improvement in the reputation of bankers