An ad valorem tax:
A. is a fixed dollar amount that must be paid on each unit bought or sold.
B. is a tax that is stated as a percentage of the good's price.
C. is a tax that is stated as a percentage of the good's price, which increases as quantity bought increases.
D. is a tax that is only paid by producers.
B. is a tax that is stated as a percentage of the good's price.
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Refer to the above figure. An increase in aggregate demand between real Gross Domestic Product (GDP) levels Y0 and Y1
A) would not increase output since the economy is already working at full capacity. B) would have no effect on the price level. C) would cause price levels to fall. D) would most likely result in some inflation.
In order to maximize its profit, a single-price monopoly produces the amount of output so that
A) P = MC. B) MR = MC. C) P = MC - MR. D) P = MR. E) P = ATC.
Compared to commercial banks and thrift institutions, finance companies are
A) heavily regulated. B) able to attract small depositors. C) prevented from making relatively small loans. D) virtually unregulated.
All of the following are shortcomings of GDP as a measure to human well-being except it:
a. Excludes quality improvements that do not increase price or quantity sold. b. Excludes international transactions. c. Excludes black market and underground transactions. d. Counts harmful and dangerous output the same as useful output. e. Excludes non-market transactions.