Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C
B. D; B
C. A; B
D. B; C
Answer: B
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Because there are many buyers and sellers in a perfectly competitive market, no one seller can influence the market price
a. True b. False Indicate whether the statement is true or false
Consider a town with three residents. The residents' demand curves for various acres of a public park are shown below.
If the park is currently 2 acres, and land costs $20 per acre, the town should:
A. purchase two additional acres. B. purchase 4 additional acres. C. reduce the size of the park. D. not change the size of the park.
If there is a 20 percentage point drop in the maximum capital-gains tax rate, _____percentage points of the increase in the share of the 1 percent can be attributed to the drop in the capital-gains tax rate.
A. 4 B. 36 C. 8 D. 20
A polluting company can be billed in proportion to its pollution through
A. Emission charges. B. Tradable pollution permits. C. Higher user fees. D. Privatization.