Jim has estimated elasticity of demand for gasoline to be 0.7 in the short-run and 1.8 in the long run. A decrease in taxes on gasoline would:
a. lower tax revenue in both the short and long run.
b. raise tax revenue in both the short and long run.
c. raise tax revenue in the short run but lower tax revenue in the long run.
d. lower tax revenue in the short run but raise tax revenue in the long run.
d
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What is the difference between a price support and a price floor?
A) A price support is below equilibrium; a price floor is above it. B) A price support is above equilibrium; a price floor is below it. C) Government buys the excess supply to maintain a price floor, but not a price support. D) Government buys the excess supply to maintain a price support, but not for a price floor. E) There is no difference between the two.
Which of the following is the best example of an investment in human capital?
a. on-the-job training received by an apprentice electrician b. an increase in the number of hours worked per week by a worker in an unskilled laboring job c. the purchase of company stock by a worker d. payments into a retirement pension plan by a skilled laborer
Monetarists differ from traditional classical theorists in their belief that
a. velocity is not constant b. the only motive for demanding money is the transactions demand c. investment is very sensitive to changes in the interest rate d. the economy operates at full-employment e. increases in the money supply do not lead to changes in real GDP
Exchange rates vis-a-vis the U.S. dollar have changed little over time
a. True b. False Indicate whether the statement is true or false