Refer to the above figure. A unit tax of $2 has been placed on the good. Which of the following statements is TRUE about the vertical distance between S1 and S2?
A) The distance is less than $2.
B) The distance is $2.
C) The distance is more than $2.
D) The distance cannot be determined with the information given.
B
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The Coase theorem states that
A) government intervention is always needed if externalities are present. B) assigning property rights is the only thing the government should do in a market economy. C) under certain conditions, the property right to an activity will be acquired by the party that values it most. D) a free-market equilibrium is the best solution to address externalities.
The Laffer curve is a curve showing
A) output as a function of the tax rate. B) tax revenue as a function of the tax rate. C) government expenses as a function of how liberal the government is. D) the tax rate as a function of government expenses.
Which of the following assumptions is made while determining equilibrium wage and labor employed in the economy?
a. Information about job vacancies is difficult to obtain for workers. b. Mobility of workers is limited, i.e., workers can not switch jobs easily. c. Jobs vary widely in scope and responsibilities. d. All person-hours of labor are treated as identical.
During the financial crisis of 2008, which company did not receive a loan from the Fed?
a. J. P. Morgan b. General Electric c. American International Group d. Bank of America