Use the figure below to answer the following question.
If a price floor in this market is set at P1, then
A. deadweight loss equals area h.
B. no deadweight loss occurs.
C. deadweight loss equals area d.
D. more information is needed to find deadweight loss.
Answer: B
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The above figure shows Jane's budget line and two of her indifference curves. How many lobster dinners will Jane purchase each month?
A) 4 lobster dinners B) 5 lobster dinners C) 8 lobster dinners D) 10 lobster dinners
A study by the Congressional Budget Office (CBO) regarding the corporate income tax included the following statement: "A corporation may write its check to the Internal Revenue Service for payment of the corporate income tax, but the money must come
from somewhere..." The comments that followed this statement argued that A) corporations pass on some of the burden of the tax to investors in the company, to workers, and to consumers. B) it is necessary to retain the tax because it is based on the ability-to-pay principle. C) the corporate income tax is a reliable source of revenue because corporations cannot avoid paying the tax. D) the tax is more progressive than the individual income tax.
The agreement of the United States, Canada, and Mexico to eliminate tariffs on the shipment of most products among the three countries is called the
a. General Agreement on Tariffs and Trade. b. Uruguay Round. c. North American Free Trade Agreement. d. Tariff Reduction Act of 1993.
The inefficiency of taxation means that imposing a tax on a good or service typically
A. increases costs across the board. B. reduces the amount produced. C. increases the amount produced. D. causes backlogs and surpluses.