Public Broadcasting, in its fund drives, often arranges for a corporation to match donations made by its employees. This is likely to ________ the free-rider problem and lead to a ________ level of contribution to the public good.
A. reduce; smaller
B. reduce; larger
C. increase; smaller
D. increase; larger
Answer: B
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Suppose the supply curve and the demand curve both have unitary elasticity at all prices. The price increase to consumers resulting from a specific tax of $1 imposed on sellers will be
A) $1. B) 50 cents. C) zero. D) Impossible to calculate without knowing the slope of the supply curve.
An effective import quota
a. lowers the price of imports b. lowers the price of domestic goods competing with imports c. increases the variety of goods available to the consumer d. increases tax revenues e. lowers the quantity demanded of the imported good
Suppose that the exchange rate between Mexican pesos and dollars is 8 pesos per dollar. If the exchange rate goes to 6 pesos per dollar, it would tend to: a. increase U.S. exports to Mexico
b. decrease U.S. exports to Mexico. c. increase Mexican exports to the rest of the world. d. decrease Mexican exports to the rest of the world.
Assume that the coefficient of elasticity of product demand is 0.1 in the food and beverages (F&B) industry and is 2.3 in the oil and gas (O&G) industry. Other things equal, labor demand will be
a. relatively inelastic in both F&B, and O&G industries. b. relatively elastic in both F&B and O&G industries. c. more elastic in O&G industry than in F&B. d. more elastic in F&B industry than in O&G.