When a tax is placed on buyers:
A. the resulting price paid by consumers is the same as if the tax were placed on sellers.
B. the resulting price received by sellers is the same as if the tax were placed on sellers.
C. the equilibrium quantity will unequivocally decrease.
D. All of these are true.
D. All of these are true.
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Of the three major categories of consumption, ________ is the most volatile because their purchase ________
A) services; is sensitive to income levels B) nondurables; is sensitive to income levels C) durables; can be postponed when incomes decline D) durables; they are necessities
Classical economists
a. argued that the money supply determined aggregate demand. b. regarded monetary policy as unimportant since the quantity of money does not determine the price level. c. believed that the quantity of money influences interest rates and real wages. d. believed that prices would increase more than proportionate to an increase in the money supply.
The government raises gasoline taxes as part of the price of gasoline and receives more tax revenues. However, after five years, the government discovers that revenues from the gasoline tax have declined
This situation would be most likely to occur if A) the long-run elasticity of supply was much greater than the long-run elasticity of demand. B) the demand for gasoline was inelastic in the short run, but elastic in the long run. C) the long-run elasticity of demand was greater than the long-run elasticity of supply. D) the demand for gasoline was perfectly inelastic in both the short run and the long run.
Carla is spending all her income on only two goods: apples and bananas. The price of an apple is $2 and the price of a banana is $1 . If Carla's marginal utility of an apple is 4 and her marginal utility of a banana is 3, she should consume:
a. more apples and fewer bananas to maximize total utility. b. more bananas and fewer apples to maximize total utility. c. more apples and more bananas to maximize total utility. d. fewer apples and fewer bananas to maximize total utility. e. her current amounts of apples and bananas to maximize total utility.