Suppose that government imposes a specific excise tax on product X of $2 per unit and that the price elasticity of demand for X is unitary (coefficient = 1). If the incidence of the tax is such that consumers pay $1.80 of the tax and the producers pay
$.20, we can conclude that the:
A. supply of X is highly inelastic.
B. supply of X is highly elastic.
C. demand for X is highly inelastic.
D. demand for X is highly elastic.
Answer: B
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With labor migration, the amount of change in the destination country's wage rates depends on the:
A. Original supply of labor in that country B. Original supply of labor in the country of origin C. Elasticity of demand for labor in that country D. Elasticity of demand for labor in the country of origin
What type of unemployment is experienced by a Latin teacher who is laid off after 25 years of teaching at a high school because the school changed Latin from being a required to an elective course?
a. classical b. cyclical c. voluntary d. structural e. frictional
Sven likes to water ski, but can only water ski during the one week each year when he is on vacation. Therefore, he plans to ski every day, for eight hours a day. The first day, Sven skied for eight hours and enjoyed every hour. The second day, Sven slept in and then skied for seven hours, which was fun but not as much fun as the first day. The third day, Sven skied for six hours, but was starting to get a bit bored by the end. The fourth day, Sven skied for four hours and then took a nap. On the fifth day of Sven's vacation, Sven went blueberry picking all day. Sven's marginal utility from his first hour of skiing was ________ his marginal utility from his tenth hour of skiing.
A. less than B. the same as C. greater than D. more negative
Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss
As shown in Exhibit 3A-1, if the market price falls from $2.00 to $1.00, then:
A. total surplus increases. B. deadweight loss increases. C. overproduction decreases. D. underproduction decreases.