Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential
B. expansionary; lower; potential
C. expansionary; higher; potential
D. recessionary; lower; lower
Answer: A
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When tastes are quasilinear, the sole reason for the deadweight loss from a per-unit tax is that output falls under the tax.
Answer the following statement true (T) or false (F)
Dyson cordless vacuum cleaners offer heavy-duty performance for cleaning all floor types. The Dyson is also very lightweight and versatile. The price for the basic Dyson model is $599. Because the Dyson provides the user with really clean floors and carpets, the Dyson is an example of _
a. consumer value b. hedonic value c. utilitarian value d. perceived value
A cafeteria is willing to produce 100 bottles of soda when the price is $1 and 150 bottles of soda when the price is $1.30, other things being equal. The price elasticity of supply of soda is
A) 1.53. B) 0.67. C) 0.10. D) 0.50.
The total of consumer plus producer surplus is greatest
A. when consumer surplus is maximized. B. at the market equilibrium. C. when producer surplus is maximized. D. all of the above