If a tax rate falls as a person's income rises, the tax is a
a. proportional tax
b. progressive tax
c. regressive tax
d. a poll tax
e. a head tax
C
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Assume that the supply curve is horizontal because marginal cost is constant at $10. John, Robert, and Jimmy each value one compact disc at $20 but only Jimmy and John value a second compact disc (Jimmy at $5 and John at $15). It follows that the optimal number of compact discs sold in this market is
a. two. b. three. c. four. d. five.
Menu costs refer to:
A. the time, money, and effort one has to spend managing cash in the face of inflation. B. labor costs associated with inflation. C. being penalized via taxes for making more money in dollars, even though real purchasing power hasn't changed. D. the money, time, and opportunity used to change prices to keep pace with inflation.
If the slope of a demand curve is constant, then so is the elasticity on that demand curve.
Answer the following statement true (T) or false (F)
According to ________, trade between two countries allows each of the trading countries to allocate its resources most efficiently.
A. the Heckscher-Ohlin theorem B. the theory of absolute advantage C. the theory of comparative advantage D. the General Agreement on Tariffs and Trade