On necessities, more of the incidence of tax is
A. borne by the producer.
B. borne by the consumer.
C. shared equally between the producer and the consumer.
D. None of these are correct.
Answer: B
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Suppose a negative externality exists in a market. If transactions costs are low and parties are willing to bargain then, according to the Coase theorem
A) an efficient solution can be reached only if property rights are assigned to the polluters. B) government intervention is critical to reach an efficient solution. C) an efficient solution can be reached only if property rights are assigned to the victims of the pollution. D) an efficient solution can be reached regardless of the initial assignment of property rights.
With fixed exchange rates, external capital-flow shocks have little impact on a country's economy.
Answer the following statement true (T) or false (F)
The judging of an individual on the basis of the average characteristics of the group to which the individual belongs rather than the individual's characteristics is:
A. Statistical discrimination B. Reverse discrimination C. Human capital discrimination D. Wage discrimination
If a product is a normal good, then its income elasticity of demand is
A) zero. B) positive. C) negative. D) indeterminate. E) greater than 1.