When a tax is imposed, the surplus that is lost to buyers and sellers but converted into tax revenue is:
A. transferred to others through public programs.
B. lost and considered a cost of taxation.
C. part of deadweight loss.
D. All of these statements are true.
A. transferred to others through public programs.
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The demand for microwaves in a certain country is given by: D = 8,000-30P, where P is the price of a microwave. Supply by domestic microwave producers is: S = 4,000 + 10P. Suppose the economy is closed. The equilibrium price of a microwave is ________ and equilibrium quantity is____.
A. $100; 5000 B. $125; 4000 C. $50; 8000 D. $75; 6000
Holding a group of assets reduces risk relative to holding a single asset as long as the assets
A) are dependent on each other. B) are positively correlated. C) are uncorrelated. D) do not have precisely the same pattern of returns.
An decrease in the real interest rate will cause an increase in ________
A) consumption B) planned investment C) net exports D) all of the above E) none of the above
In the above figure, if price is equal to P4, the firm will
A) earn positive economic profits. B) incur an economic loss. C) earn zero economic profits. D) shut down.