Refer to Figure 4-18. What is the size of the unit tax?
A) $8 B) $5
C) $3 D) cannot be determined from the figure
B
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For many years the U.S. government imposed quotas on cheap, Middle Eastern oil imports. The U.S. consumer consequently paid $3 billion more per year for oil products. A likely rationale for such a policy is
A. people in the oil industry deserved the transfer. B. conservation. C. one cannot be dependent on foreign supplies of so crucial a resource. D. American oil was of higher quality and deserved a higher price.
According to your text, who among the following have a comparative advantage in providing information that reduce transaction costs?
A) The consumer B) The bureaucrat C) The middleman D) The career politician
The change in total welfare from a 10% increase in price will depend only on the elasticity of demand
Indicate whether the statement is true or false
Which of the following quantities decrease in response to a tax on a good?
a. the equilibrium quantity in the market for the good, the effective price of the good paid by buyers, and consumer surplus b. the equilibrium quantity in the market for the good, producer surplus, and the well-being of buyers of the good c. the effective price received by sellers of the good, the wedge between the effective price paid by buyers and the effective price received by sellers, and consumer surplus d. None of the above is necessarily correct unless we know whether the tax is levied on buyers or on sellers.