Refer to the graphs above. Which of the following best represents negative demand shock when prices are inflexible?
A.
The shift from D2 to D3 in graph B
B.
The shift from D2 to D3 in graph A
C.
The shift from D2 to D1 in graph B
D.
The shift from D2 to D1 in graph A
D.
The shift from D2 to D1 in graph A
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Suppose that the government collects $3 million in taxes, pays $2 million in social security benefits, pays $0.5 million in interest on the national debt, and pays workers $1 million to sit at their desks and work as little as possible
The government's contribution to GDP is A) $0. B) $1 million. C) $3 million. D) $3.5 million.
One problem with rent controls is that policy makers often ignore its secondary effects
a. True b. False
To maximize welfare in a competitive market that has a negative externality in production, government should tax a pollution-generating good at a specific tax equal to the marginal cost of producing the good
Indicate whether the statement is true or false
Suppose a tax is implemented to fund low-income housing. Which principle of taxation is most appropriate as a guide to evaluating the tax?
a. the benefit principle b. the ability-to-pay principle c. a combination of the benefit principle and the ability-to-pay principle d. the mobility principle