Suppose the demand for wine is elastic and that initially 5 million bottles of wine are produced and consumed in the United States. If the government imposes a tax of $2 per bottle of wine, the government will collect
A) more than $10 million in tax revenues.
B) $10 million in tax revenues.
C) less than $10 million in tax revenues.
D) an amount that may be more than, equal to, or less than $10 million in tax revenues depending on the precise elasticity of demand.
C
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Consumption of fixed capital (depreciation) can be determined by:
a) adding taxes on production and imports to NDP. b) subtracting NDP from GDP. c) subtracting net investment from GDP. d) adding net investment to gross investment.
The following equations represent a simultaneous equations model:
K1= 
1K2+ 
1z1 + u1
K2= 2K1+ 2z2 + u2
OLS will suffer from simultaneity bias if:
A. u1 is correlated with z1.
B. z1 is correlated with z2.
C. K2 is correlated with u1.
D. K1 is correlated with u1.
In monopolistic competition, profits well in excess of costs are unlikely because _____.
(A) Customers always return to the product that is least expensive, even if the quality of that product is much lower. (B) Established rivals and new firms would lure customers away with slightly different and/or cheaper products. (C) Excess output can be maintained only for short periods. (D) Nonprice competition only works for the short term.
By definition, inalienable rights:
A. would never be violated in a free market environment. B. do not exist. C. cannot be sold or given away. D. belong to individuals, and so they can sell them or give them away.