Goods that are heavily taxed, such as alcohol and cigarettes, often have:
a. relatively inelastic demand, such that the tax burden falls primarily on sellers and the deadweight loss associated with the tax is smaller than if demand were elastic.
b. relatively elastic demand, such that the tax burden falls primarily on sellers and the deadweight loss associated with the tax is smaller than if demand were inelastic.
c. relatively inelastic demand, such that the tax burden falls primarily on buyers and the deadweight loss associated with the tax is smaller than if demand were elastic.
d. relatively elastic demand, such that the tax burden falls primarily on buyers and the deadweight loss associated with the tax is smaller than if demand were inelastic.
c
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Four countries, A, B, C, and D, have comparable economies. The average value of the GDP deflator in the last 12 years for Countries A, B, C, and D were 133, 122, 166, and 142, respectively. Among the four countries, which country has the most stable economy?
a. Country A b. Country B c. Country C d. Country D
A firm's opportunity cost of using resources provided by the firm's owners is called:
A. sunk costs. B. fixed costs. C. explicit costs. D. implicit costs.
People always face trade-offs because
A. they can always afford to buy different goods and services. B. trading takes place in a market economy. C. they always have more than one use for their time and money. D. they can make themselves better off through trade.
Which of the following is true? a. The private market provides too much of goods that generate external benefits
b. In the case of external benefits, if we could add the benefits that are derived by non-paying consumers, the supply curve would shift to the right, increasing output. c. In the case of external benefits, a tax equal to external benefits would result in an efficient level of output. d. In the case of public goods, when people act as free-riders, some goods having benefits greater than costs will not be produced.