This graph depicts a tax being imposed, causing demand to shift from D1 to D2. The distance AC in the graph shown represents all of the following except the:
A. amount of the tax.
B. difference between what the consumer pays and what the seller receives.
C. "tax wedge."
D. total tax revenue generated for the government by imposing the tax.
D. total tax revenue generated for the government by imposing the tax.
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Suppose that Bill is a big movie buff and enjoys renting movies from the local video rental outlet
Assume that he is willing to pay $5 for the first movie he rents for the weekend but would only pay $4 for a second and still only $3 for a third movie. If the video rental franchise charges $3.50 per movie what will Bill's consumer surplus be and why? Assume now that the video rental franchise now has a new package deal in which it offers to rent three movies to customers at a price of $9.00 would Bill be interested? How much consumer surplus would he enjoy now? What is the maximum price that the video rental franchise could charge and still make Bill interested in the package deal?
Suppose an excise tax is imposed on product X. We would expect this tax to:
A. decrease the demands for both complementary good Y and substitute product Z. B. increase the demands for both complementary good Y and substitute product Z. C. increase the demand for complementary good Y and decrease the demand for substitute product Z. D. decrease the demand for complementary good Y and increase the demand for substitute product Z.
Suppose a pizza restaurant has two pizza ovens that may be used to bake pizzas, so the restaurant has a maximum capacity constraint that affects the shape of the firm's short-run marginal cost curve
What happens to maximum capacity segment of this curve if the firm adds another pizza oven? A) Shifts upward B) Shifts downward C) Shifts leftward D) Shifts rightward
Refer to the above figure. How do you describe what is happening as the economy moves from point A to point C?
A) The economy has acquired new resources that are well suited for producing bread. B) Land that was once used to graze sheep is now being used to grow wheat. C) Resources are becoming unemployed. D) The technology for growing wheat has improved.