Refer to the graph shown. If the elasticity of supply is 1, the burden of the tax will be shared equally by consumers and suppliers at which point?
A. It depends on who pays the tax.
B. A
C. C
D. E
Answer: C
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When economists say that policy A is more efficient than policy B, they mean policy A is better than policy B.
Answer the following statement true (T) or false (F)
Refer to the above figure. The profit-maximizing price and output for this monopolist are
A) a price of P1 and output of Q1. B) a price of P4 and output of Q1. C) a price of P2 and output of Q2. D) a price of P3 and output of Q3.
Adverse selection:
A. occurs after the parties have entered into an agreement. B. is about the actions of people. C. results from unobserved characteristics of people or commodities. D. All of these statements are true.
Ceteris paribus, if interest rates in the United States rise relative to those abroad, then the surplus in the U.S. capital account would
A. Become smaller and the dollar would depreciate. B. Grow larger and the dollar would depreciate. C. Grow larger and the dollar would appreciate. D. Become smaller and the dollar would appreciate.