A price ceiling set by government will increase the equilibrium price and quantity in a market.
Answer the following statement true (T) or false (F)
False
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Which of the following tools of commercial policy yields a revenue to the government?
a. Quota b. Tariff c. Export subsidy d. Government procurement policy e. Health and safety standards
The aggregate supply curve slopes
a. downward because firms can sell more at lower prices. b. downward because firms can hire more workers at lower prices. c. upward because firms want to hire more workers at higher wage levels. d. upward because firms can hire labor at fixed wages for short-run periods.
The average tax rate is:
A. change in taxes/change in taxable income. B. total taxes/total taxable income. C. the sum of the marginal tax rate and the rate of transfer payments. D. the tax on incremental income less the tax on total income.
When sellers have more information about the quality of a good than buyers do, a relatively large share of the goods in the market will be low-quality goods. This is the ________ problem.
A. free-rider B. law of diminishing returns C. adverse selection D. moral hazard