Which of the following is an example of a demand shock?
A. Hurricane Harry knocks out oil drilling platforms in the Gulf of Mexico.
B. Consumers become worried about job loss and buy fewer goods and services than
expected.
C. Floods in the Midwest destroy crops.
D. The federal government unexpectedly requires automobile producers to raise fuel
efficiency standards.
Answer: B
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Under perfect price discrimination the monopolist produces ________ a perfectly competitive market.
A. the same amount of output as a non-discriminating monopolist as well as B. less output than an imperfectly price discriminating monopolist, but more than C. more output than an imperfectly price discriminating monopolist, but less than D. the same amount of output as would
When the tax rate increases, the tax revenue
A) always increases. B) does not change. C) always decreases. D) may increase or decrease.
Which of the following involves either the buyer or the seller of a product having more information about the quality or price of the product than the other party?
a. Asymmetric information b. Imperfect information c. Risk assessment d. Adverse selection
Suppose there is currently a tax of $50 per ticket on airline tickets. Sellers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $30 per ticket, then the
a. demand curve will shift upward by $20, and the effective price received by sellers will increase by $20. b. demand curve will shift upward by $20, and the effective price received by sellers will increase by less than $20. c. supply curve will shift downward by $20, and the price paid by buyers will decrease by $20. d. supply curve will shift downward by $20, and the price paid by buyers will decrease by less than $20.