The highest price you are willing to pay for a pair of jeans is $20 . However, you are able to purchase it for $14 . This implies $6 is the producer surplus
Indicate whether the statement is true or false
F
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The more elastic the demand for a good, the
A) less a sales tax lowers the price paid by buyers. B) more a sales tax lowers the price paid by buyers. C) less a sales tax raises the price paid by buyers. D) more a sales tax raises the price paid by buyers.
With its goal of price stability, the Fed attempts to
A) keep the inflation rate from falling below 5% and rising above 10%. B) maintain an inflation rate of zero. C) achieve a low, stable inflation rate. D) counteract periods of inflation with periods of deflation.
Good A has a price elasticity of demand of .27, while good B has a price elasticity of demand of 2.9 . To raise the most tax revenue, the government should:
a. place a unit tax on good A. b. place a unit tax on good B. c. raise the price elasticity of demand for good A. d. subsidize the production of good B. e. cut its spending for various social programs.
Fiscal federalism refers to
a. passing money from one level of government to another. b. leaving indirect taxes to the states. c. keeping property taxes low. d. making all levels of government operate on a "pay as you go" basis.