If Congress decides to reduce the tax per pack paid by sellers of cigarettes, other things being equal, the price of cigarettes will fall. This fall in prices can be attributed a(n):
A. upward movement along the supply curve for cigarettes.
B. rightward shift of the supply curve for cigarettes.
C. downward movement along the demand curve for cigarettes.
D. leftward shift of the supply curve for cigarettes.
Answer: B
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In the figure above, the shift in the aggregate demand curve from AD1 to AD3 could be the result of an increase in
A) the price level. B) foreign incomes. C) aggregate supply. D) the foreign exchange rate. E) expected future income.
In the above figure, a sales tax of $1 per unit imposed on sellers ________ the price buyers pay and ________ the price that suppliers keep for themselves
A) affects; does not affect B) does not affect; affects C) does not affect; does not affect D) affects; affects
If a homeowner's insurance policy provides coverage for less than 80 percent of the full replacement cost of the dwelling, then the loss of the residence will be settled for
A) the market value of the property less the land value. B) the lowest repair bid. C) either the actual cash value or the prorated repair cost. D) the total replacement cost.
It is estimated that a 3 percent drop in the price of Asian and European cars will decrease the demand for American cars by 0.84 percent. From this information one can conclude that:
A. the income elasticity of demand for American cars is less than 1. B. European and Asian cars are complements for American cars. C. European and Asian cars are substitutes for American cars. D. European and Asian cars are luxuries.