If the government desires to raise a certain amount of revenue by taxing a monopoly, an ad valorem tax will
A) generate the same loss of consumer surplus as a specific tax.
B) generate a greater loss of consumer surplus than a specific tax.
C) generate a smaller loss of consumer surplus than a specific tax.
D) generate no loss of consumer surplus.
C
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The supply-side effects of an income tax cut ________ potential GDP and ________ aggregate supply
A) increases; do not change B) increase; increase C) decrease; increase D) decrease; decrease E) increase; decrease
Which of the following is not a reason why government programs might fail to achieve their goals?
a. Insufficient information to correctly achieve the goal. b. One policy goal is in direct conflict with another policy goal. c. Politicians respond to political incentives to deviate from the goal. d. Inability to use coercion to achieve the goal.
The opportunity set contains:
a. a single combination of consumption that someone can afford given the prices of goods and the individual’s income. b. all possible combinations of consumption that someone can afford given the prices of goods regardless of the individual’s income. c. all possible combinations of consumption that someone can afford given the prices of goods and the individual’s income. d. a single combination of consumption that someone can afford given the prices of goods regardless of the individual’s income.
Distinguish between invention and innovation