The greater the elasticity of supply of and demand for a good, the:
A. smaller will be the efficiency loss of an excise tax on the good.
B. more likely the good will be a public good rather than a private good.
C. larger will be the efficiency loss of an excise tax on the good.
D. larger will be the proportion of an excise tax on the good that will be shifted forward to
consumers.
Answer: C
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Start-up costs:
A. have no impact on the number of firms in an industry because they are sunk costs. B. are the one-time costs incurred when beginning the production of a new product. C. are inversely related to variable costs. D. are always greater than marginal costs.
When a company hires a celebrity to endorse its product, it aims to send a message about: a. the heritage associated with its product
b. the competitive price offered for its product. c. the market share it holds. d. the quality of its product.
Since there are long waiting lists for tickets to events that regularly occur (Duke basketball, the August NASCAR race in Bristol, Tennessee, etc.), a profit-maximizing promoter might
A. lower ticket prices. B. eliminate seating. C. eliminate the event altogether. D. increase seating.
Human capital contributes to growth because it helps workers in the economy:
A. be more productive with their time. B. work smarter. C. produce more with the same amount of physical capital. D. All of these are true.