If the absolute value of the price elasticity of demand for tickets to a football game is 2, then if the price increases by 1%, quantity demanded decreases by:
A. 1%.
B. 4%.
C. ½%.
D. 2%.
Answer: D
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Which of the following statements describes a basic difference in the economic effects of a tariff versus a quota?
A. A quota raises product prices, but a tariff does not. B. A quota reduces domestic consumption of the product, but a tariff does not. C. A tariff raises product prices, but a quota does not. D. A tariff allows imports to increase if demand increases, whereas a quota does not.
Which of the following statements is TRUE about the role of gifts given to U.S. citizens from foreign residents?
A) Gifts are not included in the balance of payments because of the nature of the gift. B) Gifts are only included in the balance of payments if the gift is given to a government official. C) Gifts are included in the balance of payments. D) Gifts given to U.S. citizens are not included in the balance of payments but gifts given to foreigners are included.
The government should set the price for natural monopolies at their:
A. average total cost. B. marginal cost. C. average variable cost. D. fixed cost.
The actual incidence of payroll taxes, in the consensus view, is:
A. Split evenly between the worker and the employer B. More on the employer than on the worker C. More on the worker than on the employer D. All on the employer, who remits the tax to the government