If the elasticity of demand for cigarettes by teenagers is 1.5, then to reduce teen smoking by 60 percent, tobacco companies would need to raise their prices by:
A. 15%.
B. 40%.
C. 60%.
D. 90%.
Answer: B
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Suppose the government of a town of 2,000 people implements a tax on each of its 2,000 citizens to raise $1,000 for a sculpture that will be placed in the common area of a 5-person neighborhood
Each of the 5 people in the small neighborhood will receive $120 in benefits from the sculpture. This tax is likely to A) generate a great deal of opposition from taxpayers. B) generate a great deal of opposition from the 5 people in the affected neighborhood. C) generate little opposition from a majority of its taxpayers. D) generate the desirable social outcome.
Refer to the figure above. What is the opportunity cost of producing one computer program?
A) 0.2 Web sites B) 5 Web sites C) 8 Web sites D) 12 Web sites
Which currency below currently serves as a dominant reserve currency?
A) European euro B) U.S. dollar C) Japanese yen D) British pound
When the goods market is returning to equilibrium following a decrease in the real interest rate, ________
A) saving and output are both rising B) saving and output are both declining C) saving is rising, while output declines D) all of the above E) none of the above