Explain how lack of choice relates to where the tax burden falls in the marketplace.
What will be an ideal response?
The tax burden falls on the less elastic side of the market. The reason for this deals with lack of choice. If demand is inelastic, consumers have few viable substitutes to choose from. Because consumers have few alternatives, they are less willing to leave the market. In other words, they are more or less stuck in the market. As a result, the tax burden falls on them. The same is true for producers. If producers have few alternatives for producing a good, they are also less willing to leave the market. So the tax burden falls on them.
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When governments run budget surpluses, ceteris paribus, public saving as well as national saving decreases
a. True b. False Indicate whether the statement is true or false
Which of the following best states economists' understanding of the facts concerning the relationship between natural resources and economic growth?
a. A country with no or few domestic natural resources is destined to be poor. b. Differences in natural resources have virtually no role in explaining differences in standards of living. c. Some countries can be rich mostly because of their natural resources and countries without natural resources need not be poor, but can never have very high standards of living. d. Abundant domestic natural resources may help make a country rich, but even countries with few natural resources can have high standards of living.
Under monopolistic competition, a firm's ability to influence the price of the product it sells arises because:
A. each seller sells a standardized product. B. the product of each seller is differentiated from that of others. C. sellers in the market have large market shares. D. sellers in the market have small market shares.
For the cost function C(Q) = 100 + 2Q + 3Q2, the average fixed cost of producing 2 units of output is:
A. 3. B. 100. C. 2. D. 50.