Regardless of how price inelastic the supply curve, tax revenue from a per-unit tax rises the more price inelastic the demand curve is.
Answer the following statement true (T) or false (F)
True
Rationale: The more price inelastic either curve, the more tax revenue will be raised because the smaller will be the reduction in the quantity transacted.
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Producer surplus
A. is the difference between the minimum price producers are willing to accept for a product and the higher equilibrium price. B. is the difference between the maximum price consumers are willing to pay for a product and the lower equilibrium price. C. rises as equilibrium price falls. D. is the difference between the maximum price consumers are willing to pay for a product and the minimum price producers are willing to accept.
You have just won a ticket to see John Mayer in concert this Saturday evening. Nevertheless, it would cost you around $20 in transportation costs to go to the concert since you would have to drive to the neighboring city (where the concert is taking place). Tickets for the concert are selling for $100 in your town. Assuming you only work Monday-Fridays, the cost of going to the concert is:
A. $0 B. $80 C. $120 D. $100
Suppose the production function for a certain device is q = L + K. If neutral technical change has occurred, which of the following could be the new production function?
A) q = L + 5K B) q = 5 ? (L + K) C) q = 5L + K D) All of the above are possible.
When a firm decides to move away from ownership of a vertically integrated production process and begins to purchase supplies or other services from other businesses, it is said to be:
A. franchising. B. outsourcing. C. integrating downstream. D. integrating upstream.