Marginal analysis involves:
a. comparing the total benefits of all actions to the total costs incurred as a result of those actions.
b. abstract thinking, which is never actually utilized by consumers when making purchasing decisions.
c. holding all other variables constant when isolating the relationship between two variables
d. comparing the additional benefit from an action to the additional cost.
d
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Economists argue that the corporate income tax is an example of a tax with a high deadweight loss because
A) it encourages corporations to seek ways to evade taxes. B) taxing a corporation's income amounts to double taxing the earnings on individual shareholders' investments in corporations. C) some of the burden of the tax is passed on to consumers in the form of higher prices. D) it discourages corporations from undertaking capital investments to enhance market competitiveness.
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.
A country's imports of goods minus its exports of goods is reported in the goods balance
a. True b. False Indicate whether the statement is true or false
A supply curve;
(a) Shifts to the right when price increases. (b) Shifts to the right when an input price (e.g. wages) decreases. (c) Never shifts but slopes downwards because firms can sell more products when prices fall. (d) Both (a) and (b) are true.