Refer to the information provided in Figure 29.1 below to answer the question(s) that follow.
Figure 29.1Refer to Figure 29.1. If policy makers decide at time t5 that the economy is expanding too fast, but the policy changes start affecting the economy at t7, then the policy will be
A. optimal.
B. ineffective.
C. inappropriate.
D. well timed.
Answer: C
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If the government wants to raise tax revenue and shift most of the tax burden to the sellers, it would impose a tax on a good with a:
a. steep (inelastic) demand curve and steep (inelastic) demand curve. b. steep (inelastic) demand curve and a flat (elastic) supply curve. c. flat (elastic) demand curve and a steep (inelastic) supply curve. d. flat (elastic) demand curve and a flat (elastic) supply curve.
If marginal revenue is $8 and marginal costs is $10, the firm should increase its output.
Answer the following statement true (T) or false (F)
According to the Law of Demand, the demand curve for a good will
A) shift leftward when the price of the good increases. B) shift rightward when the price of the good increases. C) slope downward. D) slope upward.
Why do price discriminating firms often offer lower prices to children and the elderly?
A. Such a strategy lowers the costs of the firm. B. Their demand for goods and services tends to be less elastic than other consumers. C. They have a lower willingness to pay than other consumers. D. These firms are more interested in equity than profit maximizing.