One part of the supply-side argument is that
A. lower marginal tax rates can increase total tax revenues.
B. the relevant aggregate supply curve is close to horizontal.
C. lower marginal tax rates are required to induce Congress to reduce government spending.
D. the marginal tax rate should be set at 50 percent.
Answer: A
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Consumer surplus is
A. the total difference between the total amount that consumers would have been willing to pay for an item and the total amount that they actually pay. B. the total difference between the total costs firms incur in producing an item and the utility consumers derive from purchasing the item. C. the total difference between the total amount that consumers actually pay for an item and the total amount that they would have been willing to pay. D. the total difference between the utility consumers derive from purchasing an item and the total costs firms incur in producing the item.
If an average cost pricing rule is imposed on the firm in the figure above, the price will be
A) $5 per unit. B) $25 per unit. C) $15 per unit. D) $20 per unit.
Refer to Figure 15-16. Which of the following would be true if government regulators require the natural monopoly to produce at the economically efficient output level?
A) This results in a misallocation of resources. B) The firm will sustain persistent losses and will not continue in business in the long run. C) The marginal cost of producing the last unit sold exceeds the marginal benefit. D) The firm will break even.
Which of the following treaties/agreements would be associated with creating a free trade area for the European Union?
A) Treaty of Rome B) Single Europe Treaty C) Delors Agreement D) Treaty on European Union E) Schengen Agreement