If the supply curve is perfectly inelastic and the demand curve is a downward sloping straight line, what is the effect of a consumer ad valorem tax on equilibrium price and quantity?
A) Price remains unchanged and quantity increases.
B) Price decreases and quantity increases.
C) Price decreases and quantity remains unchanged.
D) Price and quantity decrease.
C
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Price floors
A) provide free market incentives for producers. B) create surpluses by setting the price above equilibrium. C) create shortages by setting the price above equilibrium. D) are used by advocates of the free market.
Compared to a negative income tax, the federal personal income tax is thought of as a way to promote greater equality. Why?
When investors use borrowed funds to pay for investments, it's called:
A. herding. B. hedging. C. leveraging. D. tulip mania.
Refer to the information provided in Figure 4.5 below to answer the question(s) that follow.
Figure 4.5Refer to Figure 4.5. The United States imports 9 million CD-Rom drives at a world price of ________ per CD-Rom drive.
A. $15 B. $25 C. between $15 and $25 D. >$25