Describe the relationship illustrated by the Laffer curve
What will be an ideal response?
The Laffer curve illustrates the relationship between tax rates and tax revenues. The Laffer curve shows that high tax rates could lead to lower tax revenues if economic activity is severely discouraged, and lower tax rates could actually lead to higher tax revenues.
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A single-price monopoly can sell 1 unit for $9.00. To sell 2 units, the price must be $8.50 per unit. The marginal revenue from selling the second unit is
A) $17.50. B) $17.00. C) $8.50. D) $8.00. E) $9.00.
In the figure above, an increase in the quantity of oil supplied but NOT an increase in the supply of oil is shown by a movement from
A) point a to point e. B) point a to point b. C) point a to point c. D) point a to point d.
Which of the following statements is correct?
A) PPP is a theory of exchange rate determination. B) Inflation differentials cause changes in exchange rates. C) PPP is an equilibrium relationship between two endogenous variables. D) PPP, or the law of one price, should hold well for individual goods.
Monopolistic competition describes a situation where: a. a few firms produce a standardized product
b. a large number of firms produce differentiated products. c. a few firms produce differentiated products. d. there are substantial barriers to entry.