Refer to the above figure. A unit tax of $2 has been placed on the good. Which of the following statements is TRUE about the vertical distance between S1 and S2?
A. The distance is less than $2.
B. The distance is $2.
C. The distance is more than $2.
D. The distance cannot be determined with the information given.
Answer: B
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Changes in stock prices
A) do not affect people's wealth and their willingness to spend. B) affect firms' decisions to sell stock to finance investment spending. C) occur in regular patterns. D) are unimportant to decision makers.
A production function of the form Q = 40 L.75 K.20exhibits ________ in the long run.
A. diminishing returns to the variable input B. decreasing returns to scale C. increasing returns to scale D. constant returns to scale
Which of the following is NOT a cost of inflation?
A) uncertainty cost B) confusion cost C) tax cost D) unemployment cost E) shoe-leather cost
Which of the following would be included in the GDP Price Index but not in the Consumer Price Index?
a. The price of a Chrysler automobile b. The price of a fighter aircraft c. The price of a used computer d. The price of a tube of toothpaste e. The price of a bottle of shampoo