Neither the demand nor the supply of sugar is perfectly elastic or inelastic. If the government imposes a 5 percent tax on sugar, the
A) price of sugar buyers pay falls by 5 percent.
B) price of sugar buyers pay increases by less then 5 percent.
C) price of sugar buyers pay does not change.
D) quantity of sugar increases.
E) price of sugar buyers pay rises by 5 percent.
B
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Refer to Figure 9.2. A movement from point b to point d could be caused by a(n)
A) decrease in government spending. B) increase in the price of oil. C) decrease in taxes. D) increase in short-run aggregate supply.
A monopsony will never pay a wage that is
A) equal to the minimum wage. B) less than the value of marginal product. C) more than the value of marginal product. D) negotiated with the union.
Which of the following products comes closest to having a perfectly inelastic demand?
A) bus rides B) cholesterol medication in general C) gasoline D) iPhones
Along a downward-sloping money demand schedule, as the interest rate falls
A) the quantity of money demanded falls. B) the quantity of money demanded rises. C) real income rises. D) real income falls.