A tax on productive activity tends to
a. increase formal market activity because it decreases prices
b. decrease formal market activity because it increases work incentives
c. decrease formal market activity because it lowers the return on such activity
d. decrease activity in the underground economy because people are afraid of being connected with tax fraud
e. increase activity in the underground economy because people are afraid of being connected with tax fraud
C
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A monopolist's cost curves may shift up because of
a. advertising expenditure. b. bureaucratic inefficiencies. c. coordination problems. d. All of the above are correct.
What are royalties?
a. fees paid to celebrities for using their names b. fees paid to law firms and accountants c. a percentage of profits paid to the government d. a percentage of earnings paid for a franchise
The rational-expectations hypothesis implies that there is no need for government stabilization policies.
Answer the following statement true (T) or false (F)
Which of the following statements is true?
A) In general, if a product has few substitutes it will have an elastic demand. B) The more time that passes the more inelastic the demand for a product becomes. C) The demand curve for a necessity is more elastic than the demand curve for a luxury. D) The more narrowly we define a market, the more elastic the demand for a product will be.