Explain why a tax increase on cigarettes in one state might not lead to a substantial price increase for all consumers in that state
What will be an ideal response?
Smuggling of non-taxed cigarettes and on-line buying where taxes don't apply by some consumers may prevent a price increase for these consumers.
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What is liquidity? Why is money the most liquid of all assets? What is the cost of this liquidity?
What will be an ideal response?
For a perfectly competitive market, long-run equilibrium is characterized by all of the following but which one?
A. P = maximum ATC. B. P = minimum ATC. C. P = MC. D. P = MR.
The supply and demand model examines how prices and quantities are determined
A. by governments. B. by monopolists. C. in markets. D. by churches.
Assume that Paris First National Bank is a thriving bank with deposits of $20 million. If the legal reserve requirement is 20 percent and the bank is fully loaned out, the bank will keep what amount of required reserves?
a. $2 million b. $4 million c. $10 million d. $16 million e. $20 million