If a tax imposed in a market generates deadweight in that market, then the tax:
A. will generate very little tax revenue.
B. could still increase economic surplus, depending on how the tax revenue is spent.
C. will necessarily lower economic surplus.
D. will never be approved by voters.
Answer: B
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The key variable in determining changes in a country's standard of living is the:
A. inflation rate. B. interest rate. C. long-run rate of economic growth. D. unemployment rate.
The use of "introductory prices" suggests
A) firms engaged in multi-period decision making. B) firms engaged in price gouging. C) firms engaged in anti-competitive behavior. D) firms engaged in single-period decision making.
A firm will choose to shut down in the short run when:
a. price is above the minimum point of AVC but below the minimum point of ATC price b. price is below the minimum point of AVC. c. marginal cost begins to increase. d. total revenue is not sufficient to cover total cost.
Inflation affects production decisions because it
A. Causes businesses to be more cautious since the future appears more uncertain. B. Causes businesses to focus more on the future. C. Decreases input costs. D. Reduces speculation.