According to this Application, some conservatives worry that a value-added tax ________ and some liberals worry that a value-added tax ________
A) will penalize high-income individuals; will decrease per-capita GDP
B) will discourage consumers from saving; will decrease federal tax revenue
C) will result in consumers not realizing all the taxes they pay; is regressive
D) is progressive; will reduce investment.
C
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Collusive action among producers creates higher prices for consumers because it:
A. causes overproduction and inefficiency. B. creates negative externalities. C. forces producers to be more competitive. D. allows producers to artificially restrict their supply.
In a market where businesses are earning high profits, new entrants will cause the supply curve to shift to the _________ and thus cause the market price to _________.
A. right; rise B. left; rise C. left; fall D. right; fall
An agreement among firms to charge the same price or otherwise not to compete is called
A) a payoff matrix. B) a subgame-perfect equilibrium. C) a Nash equilibrium. D) collusion.
Keynes' theory of consumption predicts that the aggregate saving rate
A) increases as society becomes richer. B) falls as society becomes richer. C) is constant in the long-run. D) falls with higher incomes in a cross-section of income.