Louise Bakery sells cupcakes that have an equilibrium price of $5.00 per cupcake and an equilibrium output of 300 cupcakes. Which of the following is likely to be true when the government imposes a tax of $0.75 per cupcake?
a. Producer and consumer surplus will increase.
b. Producer and consumer surplus will decline.
c. Equilibrium price will decrease
d. Equilibrium output will increase.
b
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There are two major Internet service providers in Eduland. One company has a market share of 60% and the other firm has a market share of 40%. The Herfindahl-Hirschman Index for this industry is ________
A) 100,000 B) 1,200 C) 5,200 D) 100
The immediate impact when the Federal Reserve buys government securities
A) from banks is that the level of bank reserves will decrease. B) from government security dealers is that the level of bank reserves and deposits will increase. C) from government security dealers is that the level of bank reserves will increase and the level of deposits decrease. D) from banks is that the level of deposits will increase but bank reserves will decline.
Many economists would argue that some frictional unemployment
A) creates massive economic disruptions and should be eliminated as quickly as feasible. B) should be eliminated whatever the cost. C) no longer exists because increased unemployment benefits have generally solved this problem. D) cannot and probably should not be eliminated.
Scott used $4,000,00 . from his savings account that paid an annual interest of 5% to purchase a hardware store. After one year, Scott sold the business for $4,100,000 . His accountant calculated his profit to be:
a. $300,000 b. $100,000 c. $80,000 d. $20,000