The effects of a per-unit tax imposed on sales of an industry's product would likely include
A) a lower product price at any amount of the product supplied.
B) a leftward shift of the market supply curve for the product.
C) a leftward movement along the market supply curve for the product.
D) none of the above.
Answer: B
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Which of the following is the most likely to cause the price of air travel to rise?
a. Lower prices and improved service in Amtrak (the nation's passenger railroad). b. Improved productive efficiency resulting from airline mergers. c. Higher airplane fuel costs. d. Reports that air travel safety is deteriorating.
In the coordination failure model, the most likely explanation of business cycles are
A) money supply shocks. B) government spending shocks. C) total factor productivity shocks. D) fluctuations between "good" and "bad" equilibria.
Assume that a college student purchases only Ramen noodles and textbooks. If Ramen noodles are an inferior good and textbooks are a normal good, then the income effect associated with a decrease in the price of a textbook will result in
a. a decrease in the consumption of textbooks and a decrease in the consumption of Ramen noodles. b. a decrease in the consumption of textbooks and an increase in the consumption of Ramen noodles. c. an increase in the consumption of textbooks and an increase in the consumption of Ramen noodles. d. an increase in the consumption of textbooks and a decrease in the consumption of Ramen noodles.
Which of the following situations demonstrates the endowment effect?
a. Ishani refuses to buy a used lamp at a yard sale because she has seen the same one, brand new, for a similar price at a department store. b. Aliyah prefers one brand of kombucha over another simply because the other one seems outrageously expensive. c. Dakota cannot decide which jacket is more practical, so she texts pictures of both to her mom to ask her opinion. d. Anil argues that a car dealership should give him more on his trade-in because he bought it for $43,000 only a few years ago.