If the supply curve is perfectly inelastic, _____
a. any tax will be entirely born by suppliers
b. any tax will be entirely born by demanders
c. any tax will be split by demanders and suppliers
d. the tax incidence depends upon the elasticity of the demand curve
a
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Spending VCU4 on real-world goods and services causes the nation's:
a. Monetary base to fall. b. M2 money supply to fall. c. M2 money multiplier to remain the same. d. M2 money supply to rise.
Suppose the total market value of all the final goods and services produced in the country of Cannedada was $4 billion in 2008 (measured in 2008 prices) and $5 billion in 2009 (measured in 2009 prices). Which of the following statements is definitely correct?
A. Average price levels increased in Cannedada between 2008 and 2009. B. Production increased in Cannedada between 2008 and 2009. C. Nominal GDP decreased in Cannedada between 2008 and 2009. D. The change in real GDP cannot be determined without more information.
The number of taxicabs in Motorville and the taxicab fares are regulated. The fare currently charged is $5 a ride
Motorville taxicab drivers want to obtain government's permission to raise the fare to increase their revenues and ask you to be their economic adviser. After studying the market, you come up with the following demand schedule for taxicab rides: a) Calculate the price elasticity of demand for taxicab rides as the fare rises from $5 to $6. (Use the midpoint method in your calculations.) Is the demand price elastic or inelastic for this fare rise? b) What happens to the taxicab drivers' total revenue if the fare rises from $5 to $6? How can you use your answers in part a to answer this question? Should the drivers try to obtain permission to raise the fare? c) Calculate the price elasticity of demand for taxicab rides as the fare falls from $5 to $4. (Use the midpoint method in your calculations.) Is the demand price elastic or inelastic for this fare decrease? d) What happens to the taxicab drivers' total revenue if the fare falls from $5 to $4? How can you use your answers in part c to answer this question? Should the drivers try to obtain permission to lower the fare? e) What fare will maximize the taxicab drivers' total revenue? Explain.
A perfectly competitive firm has a random demand with a 30 percent chance of being $15 and a 70 percent chance of being $20. What is the firm's expected marginal revenue?
A) $20.00 B) $15.00 C) $19.00 D) $18.50