The government can raise tax revenue and increase total economic surplus by taxing:
A. goods that generate positive externalities.
B. goods whose supply and demand curves are highly elastic.
C. luxury goods that are primarily consumed by wealthy individuals.
D. goods that generate negative externalities.
Answer: D
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The slope of the budget line is determined only by the prices of the commodities purchased.
Answer the following statement true (T) or false (F)
The value of commodity money: a. fluctuates because its value is compared with the price of the commodity in international markets. b. fluctuates because its base commodity market value is flexible
c. remains stable because a particular commodity always yields the same level of utility. d. remains constant because the production of the commodity used as money is restricted to limited hands.
It costs a company $35,000 to produce 500 graphing calculators. The company's cost will be $35,080 if it produces an additional graphing calculator. If the company produces 501 graphing calculators then
a. its average cost is greater than its marginal cost. b. its average cost and its marginal cost are equal. c. its average cost is less than its marginal cost. d. This cannot be determined from the information given.
The LM curve is drawn for a given:
a. money supply. b. interest rate. c. nominal income. d. real income.