An ad valorem tax is
A. given as a proportion of the price.
B. Latin for "buyer beware."
C. identical to a unit tax.
D. computed using the "inverse taxation rule."
A. given as a proportion of the price.
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Which of the following is included in the calculation of investment when measuring GDP?
A. changes in business inventories B. new home construction C. the purchase of new capital goods D. all of these
A competitive firm maximizes profit at an output level of 500 units, market price is $24, and ATC is $24.50. At what range of AVC values for an output level of 500 would the firm choose not to shut down?
a. AVC > $24 b. AVC = $24 c. AVC < $24 d. cannot be determined from the given information
It costs a furniture company $8,750 to produce 25 tables. The company's total cost will be $9,125 if it produces a 26th table. If the company produces 26 tables, then
a. its average cost is greater than its marginal cost. b. its average cost and its marginal cost are equal. c. its average cost is less than its marginal cost. d. This cannot be determined from the information given.
Suppose the economy is at a short-run equilibrium with real GDP greater than potential GDP. Which of the following fiscal policies would decrease real GDP and the price level?
a) an increase in government expenditure b) a decrease in taxes c) an increase in taxes d) none of the above is correct