Suppose automobile salesmen are required to pay a $1000 tax per car sold
Is it likely that the auto salesmen will bear the entire burden of this tax? Why or why not? Would it matter if the demanders were legally required to pay the tax? Explain in detail your answer.
Assuming the supply curve is not perfectly inelastic; the auto salesmen will be able to shift some of the tax burden onto car buyers through higher prices as a result of the supply curve shifting upward by the amount of the tax. It would not matter if the demanders were legally required to pay the tax. If the demanders were legally required to pay the tax their demand curve would just shift downward by the amount of the tax, leading to lower prices and output. As long as the amount of the tax was the same, it would not matter who was statutorily required to pay the tax.
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When the marginal benefit of an output exceeds the marginal cost
A. production of that output should be increased, in order to maximize economic surplus. B. increasing the production of that output would increase the missing surplus. C. reducing the production of that output would reduce the missing surplus. D. production of that output should be decreased, in order to maximize economic surplus.
Which of the following relationships is likely to exhibit negative correlation?
A) The relationship between inflation in the U.S. and traffic congestion in China B) The relationship between amount saved with a bank and the interest earned C) The relationship between the amount of precipitation in a year and the number of umbrellas sold D) The relationship between level of professional training and unemployment
Which is NOT a weakness of the policy of mandatory separation of recyclables?
A) It actually pays people to use more recyclable material, and thus more material in total. B) It is costly for households in terms of time spent. C) It is costly for the government to monitor. D) Individuals may shift away from recyclable to non-recyclable materials just so they don't have to bother to separate them. E) Implementation is difficult and consumes household space.
Buffalo in the United States almost became extinct while cattle have never been close to extinction. The difference is due to
A) the greater marginal value of a buffalo relative to a head of cattle, leading to greater "harvesting" of buffalo. B) the use of private property rights on cattle and common property rights on buffalo. C) the greater marginal value of a head of cattle relative to buffalo, leading to over-hunting of buffalo. D) the differences in size between the two animals, and the effect of size differences on the costs of hunting them.