How is the market for gasoline affected if the excise tax on gasoline is reduced?
A. The equilibrium quantity of gasoline decreases.
B. The supply of gasoline increases.
C. The equilibrium price of gasoline increases.
D. The supply of gasoline decreases.
Answer: B
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The law of demand holds
A. for individuals, but not for markets. B. for markets, but not for individuals. C. for both individuals and for markets. D. for neither individuals nor for markets.
A stock has a current annual dividend of $6.00 per year and it is expected to grow by 3% (0.03) a year. It is expected that two years from now the stock will sell for $90.00 a share. If the interest rate is 5% (0.05), the dividend-discount model predicts the stock's current price should be:
A. $101.30 B. $94.30 C. $94.90 D. $93.29
The marginal revenue product schedule is
A. a supply schedule. B. a demand schedule. C. neither a demand nor supply schedule.
Alex sees that his neighbors' lawns all need mowing. He offers to provide the service in exchange for a wage of $20 per hour. Some neighbors accept Alex's offer and others refuse. Economists would describe Alex's behavior as:
A. rational self-interest because he is attempting to increase his own income by identifying and satisfying someone else's wants. B. greedy because he is asking for a high wage that some of his neighbors can't afford to pay. C. selfish because he is asking for a wage that is higher than others might charge. D. irrational because some neighbors refused his offer.