In the short run, specific taxes on a firm result in:
a. price increases which may not persist in the long run.
b. an increase in consumer surplus because the tax permits spending in additional government services.
c. shortages of the good being taxed.
d. an increase in producer surplus because of the rise in price.
a
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I + (G – T) =
a. S + M b. S + X c. S + (M - X) d. S + (I - M)
Which of the following statements best describes the invisible hand as described by Adam Smith in The Wealth of Nations?
a. It describes how the world should be. b. Society should focus on other people. c. Self-interested behavior by individuals can lead to positive social outcomes. d. Self-interested behavior by individuals is harmful to society.
Demand for inputs is a derived demand because
a. it is derived from the need for income. b. it corresponds to the derived supply of the inputs. c. producers want the input to produce the finished good. d. it is downward sloping.
According to classical macroeconomic theory, changes in the money supply affect
a. unemployment and the price level. b. unemployment but not the price level. c. the price level, but not unemployment. d. neither the price level nor unemployment.