Suppose that the market for corn is perfectly competitive. If corn farmers are currently generating losses, then we would expect that in the long run the market
A. supply curve will shift to the left.
B. supply curve will shift to the right.
C. demand curve will shift to the right.
D. demand curve will shift to the left.
Answer: A
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For decreases in wage taxes, substitution effects put negative pressure on tax revenues while wealth effects put positive pressure on tax revenues.
Answer the following statement true (T) or false (F)
If the government imposes a sales tax on a good with a relatively more inelastic demand, the _____
a. tax revenue collected by the government will be large b. tax revenue collected by the government will be small c. deadweight loss from the tax will be large d. tax burden on producers will be large
Which of the following statements is not correct?
a. If Fiona gets a higher wage and works more, the substitution effect is greater than the income effect for her. b. If Miguel experiences a wage decrease and works less, the income effect is greater than the substitution effect for him. c. If the substitution effect is greater than the income effect, the labor-supply curve is upward sloping. d. If the income effect is greater than the substitution effect, the labor-supply curve is downward sloping.
The convergence theory is also known as:
A. Moore's law. B. Say's law. C. the income effect. D. the catch-up effect.