When a tax is placed on the buyers of a product, a result is that buyers effectively pay
a. less than before the tax, and sellers effectively receive less than before the tax.
b. less than before the tax, and sellers effectively receive more than before the tax.
c. more than before the tax, and sellers effectively receive less than before the tax.
d. more than before the tax, and sellers effectively receive more than before the tax.
c
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The longer any price change lasts over time, the
A) more difficult it is to alter quantity demanded. B) the more quickly quantity demanded will return to its original level. C) the longer the short-run equilibrium will continue to be the short-run equilibrium. D) more quantity demanded will change.
Which of the following statements best describes producer surplus in the supply and demand model?
a. Producer surplus is the area in the supply and demand model that is between the market price and the portion of the supply curve below equilibrium. b. Producer surplus is the area in the supply and demand model that is between the market price and the portion of the supply curve above equilibrium. c. Producer surplus is the area in the supply and demand model that is above the market price and the portion of the supply curve below equilibrium. d. Producer surplus is the area in the supply and demand model that is below the market price and the portion of the supply curve below equilibrium.
According to Keynes, if the economy is in a deep recession, an increase in aggregate demand will
A. increase real GDP without putting significant upward pressure on the price level. B. decrease real GDP. C. increase the price level with no effect on real GDP. D. increase both real GDP and the price level.
Suppose three neighbors must vote on the installation of a traffic light that costs $210. The cost of the light will shared by all three. Voter A values the light at $50; voter B values the light at $50; and voter C (who drives the most) values the light at $200. If the voting rule is that the majority wins, does the light get purchased? Is it efficient to purchase the light?
What will be an ideal response?