A disadvantage of unit excise taxes is they create the incentive _____
a. for producers to favor smaller products over larger products
b. for producers to favor expensive products over inexpensive products
c. for buyers to purchase more of the good then they otherwise would
d. for buyers to shift to substitute goods with ad valorem excise taxes
b
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When a production possibilities frontier is bowed outward, as more of one good is produced, its opportunity cost
A) increases. B) decreases. C) remains constant. D) might increase, decrease, or remain constant depending on how much people value the additional units of the good. E) cannot be predicted.
Which of the following will most likely generate positive externalities?
a. a hot dog vendor b. public education c. an automobile d. a steel mill
A proportional tax rate
a. rises as the tax base rises. b. falls as the tax base rises. c. imposes an equal sacrifice on all income levels. d. remains unchanged as the tax base rises.
The entry of new firms into a monopolistically competitive industry will cause the long-run equilibrium price to rise
a. True b. False Indicate whether the statement is true or false