A production or consumption quota that can be bought or sold is called:
A. a subsidy.
B. a tax.
C. a tradable allowance.
D. a buyers' or sellers' quota.
Answer: C
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Capacity utilization increases. What is the impact on aggregate expenditures and income?
A) Both increase. B) Both decrease. C) Aggregate expenditure increases and income decreases. D) Aggregate expenditure decreases and income increases.
The Laffer Curve only applies to income taxes
a. True b. False
An incumbent firm uses limit pricing
A) to set price below a potential rival's marginal cost, thus making entry unprofitable. B) to set one price for a quantity of a good below a certain limit, and a second price for purchases above the limit. C) when it has no other advantages over a potential rival. D) if it is limited in the quantity of inputs it can purchase to produce output.
If a nation with a low level of GDP per capita converges to a richer nation, the poor nation:
A. experiences low growth rates. B. enters into a free trade agreement with the richer nation. C. experiences a rate of high growth such that its GDP per capita increases to that of the richer nation. D. experiences a rate of low growth such that its GDP per capita increases to that of the richer nation.