The incidence of a tax refers to
A. who actually collects the tax.
B. how frequently the tax is collected.
C. who bears the economic burden of the tax.
D. how the tax affects prices or wages.
Answer: C
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What will be an ideal response?
A new cure for Toenail fungus is discovered for individuals resistant to the original treatment. At this point the firm producing this drug
a. Could be considered a monopoly b. Would be protected from entry by patents c. Would be facing many new entries in the market d. Only A&B
If marginal revenue equals marginal cost, the firm is maximizing profits as long as
A) the resulting profits are positive. B) marginal cost exceeds marginal revenue for greater levels of output. C) the average cost curve lies above the demand curve. D) All of the above are required.
When government imposes a tax equal to the external cost of producing a product that generates pollution, the government is said to externalize the internality
Indicate whether the statement is true or false