Refer to the information provided in Scenario 22.5 below to answer the question(s) that follow.SCENARIO 22.5: The tiny nation of Bugaboo consists of two virtually identical islands, Achoo and Zoink, separated by the Strait of Dingo. The islands are similar in geography and population. The only telephone service on the islands is cellular, and the only cellular provider on the islands is the government-owned Bugaboo Communications Company, which charges a standardized rate of 20 Bugabucks per minute. Both islands add on an additional $5 Bugabucks-per-minute usage tax. As a way to increase revenue, the island governor of Zoink decided to increase the usage tax to $10 per minute, effective January 1, 2017. The average monthly cellphone usage per month is listed in the table below.?Average
Monthly Telephone Use per Resident (minutes)Island20162017Achoo4,5005,150Zoink4,8005,225Related to the Economics in Practice on p. 727: Refer to Scenario 22.5. Using the difference-in-differences method, what is the estimated effect of the increase in the usage tax on the average number of minutes used monthly per resident in Zoink?
A. -225
B. -425
C. -650
D. -1,075
Answer: A
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Which of the following is true of productive efficiency?
a. It is a situation in which the marginal benefit from the consumption of a good declines as increments of resources are added to a certain purpose. b. It is a situation in which it is impossible to produce more of one good without decreasing the quantity produced of another good. c. It is a situation in which the mix of goods being produced represents the allocation that society most desires. d. It is a situation in which costs that were incurred in the past cannot be recovered and thus do not affect current decisions.
If the world price of a good is greater than the domestic price in a country that can engage in international trade, then that country becomes an importer of that good
a. True b. False Indicate whether the statement is true or false
Average fixed costs:
A. are a constant, regardless of quantity of output. B. always trend downward as output increases. C. are a vertical line. D. always trend upward as output increases.
In which of the following examples is excess burden not present?
A. Harriet decides to give up her Saturday hours at her law office after income tax rates rise. B. Rudolf still smokes three packs a day even after the excise tax on cigarettes rose 10 cents a pack. C. Wilma reduced the automatic payroll deduction to her savings account after the tax on interest was imposed. D. Harper decided to take a vacation in Bermuda rather than invest in stocks after the tax rate on capital gains was increased.