Explain how and why economists might hold different opinions about using a national sales tax.
What will be an ideal response?
Should show a thorough understanding of how and why economists differ. Some economists might claim the sales tax would fall disproportionately on the poor and middle classes. As a result, it would not be fair. Other economists might claim that the tax would be fair because everyone would pay their fair share, based on what they spend rather than what they earn. Economists might also disagree about the model used. Some economists may think that the model should focus on collection costs. Others might believe the model should focus on the policy’s potential to increase savings and economic growth.
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The above figure shows the relationship between the price of a slice of pizza and how many slices of pizza Ricardo buys in a week. Between points A and B, the slope of the line equals
A) -5. B) -4. C) -3. D) -1. E) -2
Coordination problems in large firms might lead to:
A. horizontal marginal cost curves. B. downward-sloping marginal cost curves. C. upward-sloping short-run average cost curves. D. upward-sloping long-run average cost curves.
The amount of funds that a nation can withdraw from the International Monetary Fund depends upon
A. the rules set up by the World Bank. B. its quota subscription. C. whether it is a developing nation or a developed nation. D. whether it is seeking a long-term or short-term loan.
Two firms in an oligopoly can always do better if one firm buys the other.
Answer the following statement true (T) or false (F)