Which is the most likely effect upon the market for cotton of a significant improvement in the quality of synthetic textiles?
A) A decrease in demand and hence a decrease in both the price of cotton and the quantity exchanged.
B) A decrease in demand and hence a decrease in the price of cotton and an increase in the quantity exchanged.
C) A decrease in demand and hence an increase in the price of cotton and a decrease in the quantity exchanged.
D) A decrease in both demand and supply and hence a decline in the quantity exchanged but no predictable change in the price of cotton.
A
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The Laffer curve is based on the idea that if the tax rate is sufficiently high, then raising it even more will actually reduce total tax revenues. According to Laffer, this happens because the growing tax rates reduce economic activity at an even faster rate
a. True b. False Indicate whether the statement is true or false
What condition is necessary for a fiat money system to work?
What will be an ideal response?
Suppose the government imposed a binding price ceiling in the market for housing. Other things equal, the effect of this price ceiling will be to:
A. allow fewer low-income people to buy water. B. give an incentive for buyers and sellers to of houses to make illegal transactions. C. decrease the quantity of houses for sale in the market. D. all of the choices are correct.
Average variable costs fall continuously as quantity of output rises.
Answer the following statement true (T) or false (F)