Assume that a 50 percent gasoline tax led to a large increase in its price and only a small decrease in the quantity of gasoline demanded. Economic analysis would lead one to conclude that
A) gasoline should not be taxed because the benefits are uncertain.
B) the benefits of taxing gasoline is a normative issue. Economic analysis can be used to contribute to discussion of this issue but cannot decide it.
C) gasoline should be taxed because the benefits of the tax would exceed the costs.
D) gasoline should not be taxed on ethical grounds since ethical benefits and costs can't be measured.
B
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Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
Which of the following statements regarding the gross domestic product is true? a. It is useful in comparing the overall performance of different economies at the same time
b. It measures aggregate income in an economy over a period of ten years. c. It measures the value of all goods and services produced in the world during a given period. d. It is a measure of an economy's price level during a particular year. e. It records the cumulative value of all goods and services produced by domestically owned factors of production.
Which of the following is NOT a determinant of the demand for gasoline?
A. The price of diesel B. Consumers' incomes C. The supply of gasoline D. The price of automobiles
Which of the following is the best example of an abstraction that would be used in an economic theory?
a. U.S. companies export thousands of various goods. b. Throughout the world, there are 42 companies producing cell phones. c. There are two companies producing tennis rackets. d. In Illinois, 62,201 people offer legal services.