Suppose a tax is imposed on each new hearing aid that is sold. The supply curve is a typical upward-sloping straight line, and the demand curve is a typical downward-sloping straight line. As a result of the tax, the equilibrium quantity of hearing aids decreases from 10,000 to 9,000 . and the deadweight loss of the tax is $60,000 . We can conclude that the tax on each hearing aid is
a. $60.
b. $120.
c. $160.
d. $200.
b
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Suppose that when the price of raspberries increases, Lonnie increases his purchases of papayas. To Lonnie
A) raspberries and papayas are substitutes. B) raspberries and papayas are complements. C) raspberries and papayas are normal goods. D) raspberries and papayas are inferior goods.
A decrease in the effective tax rate on capital would cause the IS curve to
A) shift up and to the right. B) shift down and to the left. C) remain unchanged. D) remain unchanged if taxes are fully deductible from income; otherwise, shift up and to the right.
Sail Away is competing in the sailboat market with Best Sails. Sail Away drops its price below its cost and, in doing so, drives Best Sails out of the market. Once Sail Away is a monopoly, they raise their price and enjoy economic profit. This is an example of ________.
A) market division B) output restrictions C) resale price maintenance D) predatory pricing
Labor productivity depends on the
a. quality of the labor b. the amount of capital c. the amount of natural resources d. the amount of other inputs, such as technology e. All of the answers are correct