If the government places a $0.50 tax on an item for which demand is perfectly elastic
A) the entire tax will be paid by the consumer.
B) the tax will be split equally between the consumer and producer, with each paying exactly $0.25.
C) most of the tax will be paid by the consumer.
D) the entire tax will be paid by the producer.
Answer: D
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In the foreign exchange market, how does a change in expected future U.S. exchange rate affect the demand for dollars?
What will be an ideal response?
If the market for bicycles is efficient, then
A) no more bicycles can be produced. B) marginal benefit exceeds marginal cost. C) consumer surplus must be greater than producer surplus. D) it is not possible to produce more bicycles without sacrificing another, more highly valued good. E) consumer surplus must equal producer surplus.
A public good is
a. always depletable and excludable. b. always depletable and often excludable. c. never depletable and always excludable. d. never depletable and always nonexcludable.
Why is regulation necessary to achieve “universal service“?
What will be an ideal response?