A tax increase ________ disposable income, ________ consumption expenditure, and shifts the IS curve to the ________, everything else held constant
A) increases; increases; right
B) increases; decreases; left
C) decreases; increases; left
D) decreases; decreases; left
D
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Exports are positively related to domestic income and negatively related to the exchange rate
Indicate whether the statement is true or false
If a perfectly competitive firm wants to make any sales, what is the basis for pricing its goods?
a. Prevailing market price b. Average variable cost c. Desired marginal revenue d. Market penetration price
A firm has the choice of offering "dirty" jobs that are likely to cause severe health problems for its workers or of offering "clean" jobs by installing safety equipment at a cost of $5 per hour per employee that will substantially reduce the chances of health problems. The firm will
A. install the safety equipment if workers can ascertain whether they are working a dirty or a clean job. B. never willingly choose to install the costly safety equipment. C. willingly install the safety equipment if workers are willing to be paid $7 per hour less in a clean job than in a dirty job. D. install the safety equipment if workers are willing to be paid $3 per hour less in a clean job than in a dirty job. E. never install the safety equipment without a government subsidy to do so.
When the price of cheddar cheese increases 15%, quantity demanded decreases 15%. The price elasticity of demand for cheddar cheese is ________ and total revenue from cheddar cheese sales will ________.
A. unit elastic; not change B. inelastic; decrease C. elastic; increase D. elastic; decrease