The distribution of the burden of a tax depends strictly on the elasticity of demand
a. True
b. False
Indicate whether the statement is true or false
False
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The figure above represents the production possibilities frontier for a country
a) The nation is currently producing at point B and wants to move to point C. What is the opportunity cost of the move? b) The nation is currently producing at point B and wants to move to point A. What is the opportunity cost of the move?
As a firm increases its output in the short run, average fixed cost
a. rises steadily b. falls and then rises c. falls steadily d. rises and then falls e. remains unchanged
State two examples of government-created monopolies
In the Keynesian model, an increase in government purchases affects output by
A) increasing labor supply, because workers feel effectively poorer. B) increasing saving to pay for future taxes, lowering the real interest rate and shifting the IS curve to the left. C) increasing the real interest rate due to crowding out, reducing aggregate demand. D) increasing aggregate demand as national saving declines.