The tax on gasoline in England is close to $3.20 per gallon, whereas the federal excise tax on gasoline in the United States is 18.4 cents per gallon. Suppose the U. S. government raised the federal excise tax to the English gas tax rate of $3.20
Explain the likely impact of that higher tax rate on conservation, oil exploration, and the development of substitutes for gasoline.
The increase in the federal excise tax on gasoline would increase the price of gasoline, which would decrease consumption and encourage conservation. The higher gas price would make it more profitable for oil companies to expand exploration, and it would encourage the development of substitutes for gasoline.
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Consider the demand curves for soft drinks shown in the figure above. A movement from point a to point b represents
A) a decrease in quantity demanded. B) an increase in demand. C) an increase in quantity demanded. D) a decrease in demand.
To be a natural monopoly, a firm must
A. control an essential natural resource input. B. be very large. C. have a continuously falling average cost curve as output rises. D. have falling average costs over a substantial range of total market demand.
When your grandfather keeps a bundle of $100 dollar bills behind a brick in the basement, this is an example of dollars serving as:
A. a medium of exchange. B. a store of value. C. bank reserves. D. a unit of account.
A bowed Production Possibilities Curve (PPC) indicates
A) inefficient production. B) that the trade-off between the 2 goods is not constant. C) changing technology. D) only 1 good is always being produced.