Refer to Figure 4-11. Suppose the market is initially in equilibrium at price P1 and then the government imposes a tax on every unit sold. Which of the following statements best describes the impact of the tax?
A) The consumer will bear a greater share of the tax burden if the demand curve is D2.
B) The consumer will bear a greater share of the tax burden if the demand curve is D1.
C) The consumer will bear the entire burden of the tax if the demand curve is D1 and the producer will bear the entire burden of the tax if the demand curve is D2.
D) The consumer's share of the tax burden is the same whether the demand curve is D1 or D2.
Ans: A) The consumer will bear a greater share of the tax burden if the demand curve is D2.
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The federal government debt as a percentage of GDP fell
A) from 1980-1992. B) from 2002-2007. C) during the Great Depression. D) during World War I and World War II. E) from 1998-2001.
A firm that is a price taker can:
a. substantially change the market price of its product by changing its level of production. b. sell all of its output at the market price. c. sell some of its output at a price higher than the market price. d. decide what price to charge for its product.
Alex, who is risk-neutral, is looking for a one-bedroom apartment to rent for the month of August while he's on vacation in Seattle. All of the one-bedroom apartments in the neighborhood where he wants to stay are of equal quality, but 70 percent rent for $700 per month, 20 percent rent for $600 per month, and 10 percent rent for $500 per month. The first apartment Alex finds rents for $700 per month. Suppose Alex is risk-neutral. If the cost to Alex of searching for another apartment is $30, then will he search for another apartment?
A. No, because searching for another apartment is a less-than-fair gamble. B. Yes, because searching for another apartment is a better-than-fair gamble. C. Yes, because searching for another apartment is a fair gamble. D. No, because searching for another apartment is a fair gamble.
Is an increase in GDP good for America?
A. Yes B. No C. Maybe