In what way is the result of an excise tax imposed on either demanders or suppliers similar to the result of a price ceiling?
a. The amount that consumers pay for the good will be less than they previously paid
b. The amount of the good that will be traded in the market will be less than previously traded
c. both price ceilings and excise taxes create excess demand
d. The amount that consumers pay for the good will be greater than they previously paid
e. both price floors and excise taxes create excess supply
B
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Because of the kind of externalities that tend to be generated from general R&D resources bought by firms, the equilibrium price of R&D
A) is above the optimal level, and quantity is below the optimal level. B) is below the optimal level, and quantity is above the optimal level. C) and quantity of R&D are both above the optimal level. D) and quantity of R&D are both below the optimal level. E) must fall in order for the market to reach equilibrium.
If the dollar price of the English pound increases from $1.50 to $1.75, the dollar has
a. appreciated relative to the pound, and English goods have become less expensive to U.S. consumers. b. depreciated relative to the pound, and English goods have become less expensive to U.S. consumers. c. appreciated relative to the pound, and English goods have become more expensive to U.S. consumers. d. depreciated relative to the pound, and English goods have become more expensive to U.S. consumers.
A recent study found that an increase in the federal tax on beer (and thus an increase in the price of beer) would reduce the demand for marijuana. We can conclude that:
A. beer and marijuana are substitute goods. B. beer and marijuana are complementary goods. C. beer is an inferior good. D. marijuana is an inferior good.
For a cartel to work, demand for the cartel's product must be
A. inelastic. B. perfectly elastic. C. elastic. D. unit elastic.