When a tax is imposed on buyers, consumer surplus decreases but producer surplus increases
a. True
b. False
Indicate whether the statement is true or false
False
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
Among the distinguishing characteristics of different types of markets are
a. the number of firms in an industry. b. the presence or absence of product differentiation. c. the ability of any or all firms in an industry to influence market price. d. All of these.
One difficulty in managing common property resources is that
A) the monopoly firm that owns such a resource typically has great economic power, so that breaking it up into smaller firms is not practical. B) the monopoly firm that owns such a resource typically is a natural monopoly, so that it is undesirable to break it up into smaller firms. C) many common property resources are so small that management would have to be done on a micro level, greatly increasing government activity in the economy. D) many common property resources are so vast that single ownership or management of them is not practical, especially if they cross international borders. E) more and more of them come into being as pollution increases.
The fallacy of composition is:
a. the erroneous view that an economic activity can sometimes exceed the sum of its components b. the erroneous view that what is true for the individual will also be true for the group. c. the view that the aggregation of economic activity will necessarily lead to an outcome that is different than the outcome generated by each individual in the group. d. the idea that association need not imply causation.