If the demand curve for a good is unit price elastic and the supply curve is perfectly price elastic, a $1 specific tax imposed on the sellers of this good will
A) shift the supply curve up vertically by $1.
B) shift the demand curve down vertically by $1.
C) not raise price at all.
D) cause price to increase but by less than $1.
A
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James used $250,000 from his savings account that paid an annual interest of 15% to purchase a hardware store. After one year, James sold the business for $320,000 . What is his accounting profit?
a. $320,000 b. $70,000 c. $282,500 d. $32,500
Most economic model builders would claim that their models
a. include all real-world economic activities b. portray how the real economy works c. take into account all the complexities of how people behave d. contradict the ceteris paribus assumption e. consider all the important pressing issues people confront
As the interest rate increases, ceteris paribus, the trade-off between present and future consumption
A. Encourages less saving. B. Makes it more appealing to sacrifice current consumption. C. Is not affected. D. Makes it less appealing to sacrifice present consumption.
Exhibit 20-5 Money, investment and product markets
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In Exhibit 20-5, when the money supply increases from MS1 to MS2, the equilibrium interest rate:
A. decreases from i1 to i2, decreasing investment spending from I2 to I1. B. increases from i2 to i1, increasing investment spending from I1 to I2. C. increases from i2 to i1, decreasing investment spending from I2 to I1. D. decreases from i1 to i2, increasing investment spending from I1 to I2.