When economists attempt to predict the spending patterns of U.S. households, they will typically view the _________ as a primary determining factor that influences the individual consumption choices that each will make.
A. national average spending level
B. national average savings level
C. income level of each household
D. nation's perennial political debate
Answer: C. income level of each household
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The U.S. antitrust enforcers will likely block a merger if
A) the merging firms already earn excessive profits. B) the merging firms are in different markets. C) the merger will substantially increase market power. D) the degree of concentration declines as a result of the merger.
A monopoly sells 10 units of output at $10. If the marginal revenue of the 11th unit is $4.50, then the price of the 11th unit is
A. $9.50. B. also $10. C. $7.25. D. $11.
Refer to the scenario above. The nominal GDP of the country in Year 1 was ________
A) $280,000 B) $2,200,000 C) $1,400,000 D) $540,000
There is a difference between who is legally required to send a tax payment to the government and who bears the burden of the tax. Which of the following would have the most impact on who bears the burden of an excise tax?
A) The elasticity of demand for the item that is taxed. B) whether the tax is based on the ability-to-pay principle or the benefits-received principle C) whether the tax is imposed by the federal government or a state government D) The motive for the tax. If the tax is designed to raise revenue, more of the burden will fall on firms. If the tax is designed to achieve a social objective (for example, to discourage smoking) more of the burden will fall on consumers.