The federal government decides to impose a 15% excise tax on luxury yachts. An economist would suggest that:
a. this is an effective way to indirectly tax the wealthy
b. the tax incidence will fall largely on those who buy luxury yachts
c. if prospective buyers decide to purchase other luxury goods instead, the tax incidence will largely fall on those who build and sell luxury yachts
d. the price of luxury yachts will rise by 15%
c
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Refer to the above figure. The equilibrium level of real GDP occurs
A) at point A. B) to the right of point A. C) to the left of point A. D) at the undetermined point on the graph depending upon the level of investment.
If Britain had not joined the ERM, the policy options it would have had available to avoid recession would have been:
A) severely limited. B) more numerous and varied. C) subject to veto by the European Parliament. D) a conflict with its desire to maintain a stable economy
Which of the following is true about average fixed cost?
A. Average fixed cost has a U-shape, and marginal cost crosses average fixed cost at its minimum point. B. Average fixed cost does not vary as output increases. C. Average fixed cost is the difference between marginal cost and average total cost. D. Average fixed cost is total fixed cost divided by the quantity of output produced, and it declines steadily as output increases.
When a firm engages in price discrimination, it sets marginal revenue equal to marginal cost for each separate set of consumers.
Answer the following statement true (T) or false (F)