A carbon tax on fossil fuels is likely to cause the price of goods produced by firms that use fossil fuels to:
A. decrease.
B. not change.
C. increase.
D. change, but in a way that cannot be determined.
Answer: C
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In Figure 4-6 above, suppose we are initially at point 2. A reduction in government spending causes income to change by ________ and the interest rate to change by ________ than would be the case in the Chapter 3 model
A) more, more B) more, less C) less, more D) less, less
Explanations for the high saving rate in China consistent with the life-cycle reason for saving include:
A. lifetime employment. B. low unemployment rates in Japan. C. the desire to leave resources to children who provide support and attention to parents in their old age. D. China's social safety net provides most people little in the way of retirement income.
A new firm enters a market which is initially serviced by a Bertrand duopoly charging a price of $30. Assuming that the new firm is equally as efficient as the incumbent firms, what will the new price be should the three firms coexist after the entry?
A. Equal to $30 B. Above $30 C. Below $30 D. Unable to tell given the information provided.
An industrial union:
A. Is most concerned with increasing the demand for workers in an industry B. Restricts supply of labor through licensing requirements C. Organizes a wide range of workers in an industry to gain bargaining power D. Is most effective in a purely competitive industry