Value-added taxes (VAT) are very popular in the United States.
A. True
B. False
C. Uncertain
B. False
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Free-market economies have led to
A. high growth rates but low efficiency. B. high efficiency and low growth rates. C. high growth rates and high efficiency. D. low growth rates and low efficiency.
Suppose ordinarily half your class would get an A and half would get a B, with A students having a 25% chance of getting an A and B students having a 25% of getting an A. It costs $100 to persuade the instructor to raise a B grade to an A. A student is willing to pay $40 to insure she will get her usual grade and $70 to insure she will get a higher grade than usual. a. Who would buy insurance and at what price in a competitive equilibrium?
b. Suppose it costs $5 to truthfully signal your type and $10 to falsely signal what type of student you are, and if an insurance company receives no signal, it will interpret this as a signal that you are a B student. What would be the competitive outcome now? c. Suppose a new teacher comes in -- and this teacher is willing to change a grade for just $60. How does your answer to (a) change? d. How would your answer to (b) change? e. Can you change something in the problem that would result in only A-students buying insurance? What will be an ideal response?
The adverse selection of wage cuts argument points out that the productivity of workers will increase if they are paid more, and so employers will often find it worthwhile to pay their employees somewhat more than market conditions might dictate
a. True b. False Indicate whether the statement is true or false
If the price of a normal good rises, the opportunity cost of that good rises and households buy less of the good.
Answer the following statement true (T) or false (F)