A local government currently has a tax base of $4 million and a tax rate of 5 percent. If the tax rate is increased to 6 percent, the tax base will decrease to $3.5 million. If the goal is to maximize tax revenues the tax rate should be
A. reduced to 5 percent.
B. abolished.
C. lowered below 5 percent.
D. kept at 6 percent.
Answer: D
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The quantity demanded of a product increases as
A) the price of the product rises. B) the price of the product falls. C) consumer income rises. D) the prices of other products fall.
Which of these is not a good example of skill-biased technical change?
A) GPS navigation equipment in delivery trucks B) web-enabled virtual classrooms C) self-service check out scanners D) use of robots in automobile assembly
Productivity is defined as the quantity of
a. labor required to produce a nation's GDP. b. labor required to produce one unit of goods and services. c. goods and services produced from each unit of labor input. d. goods and services produced per unit of time.
Suppose you have a fixed amount of income to spend on two goods, X and Y. The price of good X is Px = $10, and the price of good Y is Py = $5. The marginal utility of X is MUx = 60 utils, and the marginal utility of Y is MUy = 15 utils. How should consumption of X and Y change, if at all, to increase utility?
What will be an ideal response?