A decrease in the size of a tax is most likely to increase tax revenue in a market with
a. elastic demand and elastic supply.
b. elastic demand and inelastic supply.
c. inelastic demand and elastic supply.
d. inelastic demand and inelastic supply.
a
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If weak aggregate demand is pushing the economy into recession, which of the following must be true?
A) The economy is at an equilibrium that is on the long-run Phillips curve. B) The economy is at an equilibrium that is not on the long-run Phillips curve. C) Contractionary monetary policies will push the economy back to the long-run Phillips curve. D) The economy is at an equilibrium that is on the long-run aggregate supply curve.
If rent seeking was, on average, a losing proposition, _____
a. rent seekers would exit rent seeking until losses from rent seeking equaled zero b. rent seeking would stop because it was no longer profitable c. rent seekers would increase competition for scarce benefits d. rent seeker would exit rent seeking until there is a normal rate of return to rent seeking
The owner of a call option can buy a futures contract at the premium price.
a. true b. false
The elasticity of a perfectly horizontal line is ______; the elasticity of a perfectly vertical line is _____.
Fill in the blank(s) with the appropriate word(s).