If the government wants to raise tax revenue and shift most of the tax burden to the consumers, it would impose a tax on a good with a
a. flat (elastic) demand curve and a steep (inelastic) supply curve.
b. steep (inelastic) demand curve and a flat (elastic) supply curve.
c. steep (inelastic) demand curve and steep (inelastic) demand curve.
d. flat (elastic) demand curve and a flat (elastic) supply curve.
B
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In the IS-LM model, an easy monetary in conjunction with a tight fiscal policy
a. increases exports and decreases imports. b. decreases exports and increases imports. c. encourages foreign capital inflows to the U.S. d. both b and c. d. None of the above
If the cross-price elasticity of demand is positive, then the
a. two goods are complements b. two goods are substitutes c. two goods have no relationship to each other d. price is below the equilibrium e. price is above the equilibrium
Suppose workers from group A have an average productivity of $15 per hour and that employers have a productivity test that is 100% accurate 1/3 of the time, but has no value 2/3 of the time. What is the best estimate of the VMP of a worker from group A with a test score of $21 per hour?
A. $18 B. $21 C. $13 D. $17
Suppose you are deciding whether or not to increase production. You are making a loss with many competitors. If you produce one more unit, your increase in cost will be $10, your average variable costs will increase to $9.50, and your average fixed costs will decrease. Finally, the price you are able to charge will be $9.75. You should
A. increase production by exactly 1 unit. B. increase production by at least 1 unit. C. leave production unchanged because profit is maximized where you are. D. shut down.