Refer to the information provided in Scenario 36.5 below to answer the question(s) that follow.SCENARIO 36.5: The tiny nation of Bugaboo consists of two virtually identical islands, Achoo and Zoink, separated by the Strait of Dingo. The islands are similar in geography and population. The only telephone service on the islands is cellular, and the only cellular provider on the islands is the government-owned Bugaboo Communications Company, which charges a standardized rate of 20 Bugabucks per minute. Both islands add on an additional $5 Bugabucks-per-minute usage tax. As a way to increase revenue, the island governor of Zoink decided to increase the usage tax to $10 per minute, effective January 1, 2017. The average monthly cellphone usage per month is listed in the table below.?Average
Monthly Telephone Use per Resident (minutes)Island20162017Achoo4,5005,150Zoink4,8005,225Related to the Economics in Practice on p. 727: Refer to Scenario 36.5. Using the difference-in-differences method, what is the estimated effect of the increase in the usage tax on the average number of minutes used monthly per resident in Zoink?
A. -225
B. -425
C. -650
D. -1,075
Answer: A
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A. having so much data to work with. B. inadequate and imperfect information. C. an incomplete consensus on the basic goals of social policy. D. the lack of public interest and opinion on economic questions. E. the major economic problems society faces.
Monetary policy is impotent when the LM curve is
A) vertical. B) horizontal. C) downward-sloping. D) horizontal or downward-sloping.
An example of the command-and-control approach to environmental policy is:
a. allowing individuals to sue freon producers if CFC emissions exceed a government-set standard. b. allowing coal producers to buy and sell permits to allow CFC emissions. c. placing a tax on freon to reduce its use and the corresponding CFC emissions (which contribute to the ozone hole). d. none of these.
If the government enacts a tariff on a component imported by a domestic manufacturer from an international supplier, which of the following would be the best example of a disruptive outcome?
a. The manufacturer would pay a higher price for the component. b. The manufacturer would seek an alternative supplier for the component. c. The manufacturer would move production overseas to the country where the component is manufactured. d. The manufacturer would negotiate a lower price for the component.