An ad valorem sales tax can be thought of as
A. not part of the tax base.
B. a progressive tax.
C. a proportional tax.
D. none of these.
Answer: C
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Refer to Price Ceiling. After the price ceiling is imposed, consumers' surplus is equal to
The following questions refer to the accompanying diagram which shows the effects of a price ceiling. The initial price and quantity are P0 and Q0, respectively, and the price ceiling is imposed at the price P1. Assume that none of the potential deadweight loss can be avoided.
a. area A.
b. area A + B.
c. area A + B + D.
d. area A + B + C + D + E + F + G.
A lender of the last resort refers to
A) a role of the central bank to prevent bank runs for temporary problems of liquidity. B) a role for the government to ensure that the central bank has adequate reserves. C) a reason for regulating banks. D) the need for market based regulations in the banking industry.
An example of moral hazard is
a. A taxi driver paid per mile taking the shortest route b. a piece-rate garment worker shirking more than a per jour worker c. an hourly salesman working less hard than a commission salesman d. an author on contract going to as many book signings as one with a percentage royalty rate
If an employment situation is characterized by adverse selection,
a. there are too many applicants for each job b. there are too few applicants for each job c. there are exactly the right number of applicants for each job d. there is an excess supply of overqualified applicants for each job e. there is an excess supply of underqualified applicants for each job