Which of the following statements is TRUE of static tax analysis?
A) A government receives lower tax revenues by raising the tax rate.
B) A government receives higher tax revenues by raising the tax rate.
C) A government cannot change it tax revenues by changing the tax rate.
D) A change in the tax rate can raise or lower tax revenues, depending on other factors.
B
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As the price of an existing bond increases,
A. The current yield decreases. B. There is increased risk that the U.S. Treasury will default on the bond. C. The coupon rate decreases. D. The par value decreases.
If some inputs of production do not vary with the level of output we call them fixed inputs which when multiplied by their price become fixed cost. Which of the following items typically fit this category?
A. Insurance payments B. Interest on loans C. Property taxes D. All of these are fixed costs
Which of the following best illustrates the fallacy of composition?
a. If Jamal had more money, he could afford to buy more goods.
b. If Aisha stood up at a basketball game, she could get a better view of the game; if everyone stood up at a basketball game, everyone could have a better view of the game.
c. If the price of bread rose, consumers would buy less; if consumers bought less bread, the price of bread would rise.
d. High housing prices cause people to buy less housing, but an increase in income might cause them to buy more housing.
The major similarity between monopolistic competition and perfect competition is
A. both assume products are differentiated. B. that both assume many buyers and sellers. C. the shape of the demand curve. D. price equals marginal revenue in each.