Which of the following is a negative economic effect that might occur if the government instituted a special tax on luxury vehicles?
a. More of the luxury vehicles would be on the road.
b. Autoworkers making the vehicles might lose their jobs.
c. Pollution from luxury vehicles would be lower.
d. Money from the tax could be used for road repairs.
b. Autoworkers making the vehicles might lose their jobs.
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Halifax & Smyth (H&S) is a clothier that specializes in expensive men's suits, and the firm makes the suits from wool fabrics that are woven by one of the firm's divisions
This division is not the only source for this material, and H&S could buy or sell wool fabric in the outside competitive market. H&S will buy some of the wool fabric that it needs for suits from the outside market if the: A) market price is less than the optimal transfer price if the outside market did not exist. B) market price is less than the point where the net marginal revenue of weaving wool fabric intersects the marginal cost of wool fabric. C) market price is less than the point where the net marginal revenue of assembling men's suits intersects the marginal cost of assembly. D) Both A and B are correct.
Which of the following is a characteristic of perfect competition?
a. substantial barriers to entry b. homogeneous products c. few sellers d. each firm has significant control over the market
An inflow of capital and a trade deficit are more dangerous when
a. the inflow of capital is channeled into private investment. b. the inflow of capital is used to finance current consumption and/or channeled into unproductive projects. c. the unemployment rate of the country is low, because this will mean the capital inflow will be inflationary. d. the investment rate is already high and the unemployment rate low.
When the fed wants to end a recession, they will act to ___ interest rates and ____ the money supply
a. increase; increase b. increase; decrease c. decrease; decrease d. decrease; increase