A sales tax will be divided so that
A) the buyers pay the full amount if supply is perfectly inelastic.
B) the sellers pay the full amount if supply is perfectly inelastic.
C) the sellers pay the full amount if supply is perfectly elastic.
D) both buyers and sellers pay some of the tax if supply is perfectly elastic.
B
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Refer to Figure 9-1. Suppose the government allows imports of leather footwear into the United States. What will the market price be?
A) $10 B) $18 C) $24 D) >$24
A deferred payment scheme is more likely to be accepted by a worker if
A) the firm has a reputation of not firing senior employees to save pension costs. B) the worker is very young. C) the worker is very old. D) None of the above.
A decrease in demand will have what effect on equilibrium price and quantity?
a. Price will increase; quantity will decrease. b. Price will decrease; quantity will increase. c. Both price and quantity will increase. d. Both price and quantity will decrease.
Currently, the Federal Reserve earns approximately $30 billion of interest annually on its holdings of government bonds. Only a small portion of these earnings is required to cover the Fed's operating costs. The remainder of these earnings is
a. distributed to the member banks of the Federal Reserve system. b. invested in corporate stocks held by the Fed. c. returned to the U.S. Treasury. d. loaned to commercial banks.