If the percentage change in price is 10 and the percentage change in quantity supplied is 10, supply is:
A. unaffected by price changes.
B. inelastic.
C. unit elastic.
D. elastic.
Answer: C
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One argument advanced in favor of not increasing the income tax on individuals with high income is that
A) increasing income tax increases wealth which contributes to increases in GDP. B) increasing the income tax on these individuals will reduce economic efficiency. C) not increasing income taxes will discourage corporations from increasing investment. D) increasing the income tax affects mostly middle-income and low-income individuals who are already paying heavy income taxes.
If a production process generates pollution, then a competitive market will produce more of the good than is socially optimal because
A) firms take all costs into consideration. B) firms incur all costs of production but ignore some of them. C) firms ignore the costs of production that they do not incur. D) firms set price equal to social marginal cost.
If retailers' marginal cost from providing product-specific services for a new smart television is $50, if retailers offer the product-specific services for the television, the market ________ will ________.
A) supply; parallel shift to the left by $50 B) supply; parallel shift to the right by $50 C) demand; not shift D) demand; parallel shift to the left by $50
All other factors equal, as nominal interest rates increase, checking account balances should:
A. remain constant. B. be converted to cash. C. decrease. D. increase.