There would be no excess burden from a tax if demand were
A. perfectly inelastic.
B. perfectly elastic.
C. unitarily elastic.
D. upward sloping.
Answer: A
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The tools, instruments, machines, and buildings that people use to produce goods and services are called human capital
Indicate whether the statement is true or false
When Pigouvian subsidy is imposed on a market with a positive externality, total surplus:
A. decreases less than the increase in consumer surplus. B. increases less than the decrease to producer surplus. C. increases more than the increase in consumer surplus. D. decreases more than the decrease to producer surplus.
Which of the following arguments is not generally made to justify farm subsidies?
A. The "family farm" is an American institution that should be protected and nurtured. B. Agribusiness firms need subsidies to achieve economies of scale. C. Farmers sell their output in purely competitive markets but must buy inputs from imperfectly competitive firms. D. Farmers cannot fully insure themselves against the risks unusual to farming, such as floods, droughts, and pests.
Government payment of a per-unit subsidy for health care services causes the out-of-pocket price that consumers pay for care to be
A. less than the price that health care providers receive for providing care. B. equal to zero. C. greater than the price that health care providers receive for providing care. D. greater than the market clearing price without the subsidy.