Thomas Hobbes argued for a tax on consumption instead of on income because
A. a tax on consumption raises more revenue than a tax on income.
B. consumption is the best indication of ability to pay.
C. a tax on income discourages saving by taxing savings twice.
D. the standard of living depends not on income, but on how much income is spent.
Answer: D
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Using a broad definition, a firm would have a monopoly if
A) it produced a product that has no close substitutes. B) it does not have to collude with any other producer to earn an economic profit. C) it can make decisions regarding price and output without violating antitrust laws. D) there is no other firm selling a substitute for its product close enough that its economic profits are competed away in the long run.
If the dependent variable Y is directly related to the independent variable X, this means that changes in X cause changes in Y
a. True b. False
Objections to free trade
a. often come from those who are harmed by trade b. make no sense because everyone benefits from trade c. usually arise outside of the United States d. are not economically rational e. reflect a lack of understanding of the benefits of international trade
Refer to Scenario 13.2 below to answer the question(s) that follow. SCENARIO 13.2: The government of Stratospheria is currently inviting investors to bid for the exclusive right to provide cable television service to its residents. The market demand for this service is P=55-0.01Q, where Q is the number of households that would subscribe to the cable service and P is the monthly fee charged to the subscribers. The associated marginal revenue curve is MR=55-0.02Q. Fun Cable Company is interested in bidding for the right to provide cable service in Stratospheria. It has a constant average and marginal cost of $5 for providing cable service to each household.Refer to Scenario 13.2. At what level of output (number of households) is Fun Cable Company's total revenue maximized?
A. 2,500 B. 2,750 C. 5,000 D. Indeterminate from the given information.