In general, raising taxes has:
A. increasing returns to revenue.
B. diminishing returns to revenue.
C. increasing then decreasing returns to revenue.
D. constant returns to revenue.
B. diminishing returns to revenue.
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Asarta Inc. is polluting into a nearby fishing; doing so benefits them $40,000 a year. The fishermen are unhappy as their trout are dying off. Typically, the fishermen can catch trout and sell it to a local market where they can earn about $8,000 a year. Currently, the fishermen have the rights to use the stream as they see fit. Which of the following is an optimal solution according to the Coase Theorem?
A. Asarta Inc. could pay the fishermen $8,500 and keep polluting B. There is no optimal solution given the current property rights C. The fishermen could pay Asarta Inc. $4,000 to stop them from polluting D. Asarta Inc. could pay the fishermen $7,000 and keep polluting
If aggregate planned expenditure is greater than GDP, then
A) the consumption function will shift downward to restore the equilibrium. B) a recession will result. C) inventory investment is larger than planned. D) production is too high. E) inventory investment is smaller than planned.
All of the following are problems cited by Warren Buffet as problems with derivatives not traded on exchanges EXCEPT
A) they are thinly traded which makes it difficult to determine their value. B) firms do not set aside reserves against potential losses. C) they involve substantial counterparty risk. D) they were not flexible enough due to lack of standardization.
Which of the following is true under natural monopoly?
A. The marginal cost curve will be above the average cost curve. B. The monopolist will set price equal to marginal cost and will earn economic profits. C. Economies of scale exist. D. Output is produced under conditions of constant cost.