An excise tax
A. is often used to encourage the use of a good.
B. is a value added tax (VAT).
C. acts as a negative incentive to consume that good or service.
D. is illegal in most cities in the United States.
Answer: C
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Selling a newspaper at retail for ten cents when it cost twenty cents wholesale may be profitable if
A) people who come in to buy a newspaper often make other purchases also. B) the wholesaler is also losing money. C) there are no substitutes for newspapers available. D) there is about to be a newspaper strike.
Refer to the graphs shown. Assume the graph reflects demand in the automobile market. Which arrow best captures the impact of increased gasoline prices on the automobile market?
A. A B. B C. C D. D
Refer to the graphs below. They show the long-run average total cost (LRATC) for a product. For which graph would a firm experience first economies and then diseconomies of scale over its range of output?
A. Graph A
B. Graph B
C. Graph C
D. Graph D
The curve in the above figure shows alternative combinations of gasoline and coffee that Sam likes equally well. This curve is called
A) a budget line. B) a demand curve. C) a consumption curve. D) an indifference curve.