If a 5 percent increase in income leads to a 10 percent decrease in quantity demanded for a product, this product is
A) a necessity. B) an income elastic good.
C) an inferior good. D) a luxury good.
C
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If the income tax rate is 20 percent and the tax rate on consumption expenditure is 15 percent, then the tax wedge is
A) 2 percent. B) 35 percent. C) 300 percent. D) 5 percent. E) None of the above answers is correct.
The marginal revenue curve of a monopolistically competitive firm is
A) downward sloping and above the demand curve. B) downward sloping and below the demand curve. C) identical to the demand curve as there are many small firms in the market. D) perfectly elastic.
The social cost attached to monopolies is reflected by the fact that
A) monopolies produce more output than consumers desire to buy. B) consumers pay prices that exceed the marginal cost of production. C) the demand for a monopolist's product is always lower than the demand for the products of perfectly competitive firms. D) consumers are always willing to pay lower prices for a monopolist's product than for the products of perfectly competitive firms.
When the dollar "cost" of a unit of foreign currency falls, the dollar is against the foreign currency.
a. depreciating b. appreciating c. equalizing d. holding its own