Answer the following statements true (T) or false (F)
1. A state government seeking to increase its excise-tax revenues is more likely to increase the tax rate on items with elastic demand.
2. The demand for cocaine among addicts is relatively elastic.
3. The law of supply indicates that the price-elasticity of supply coefficient would have a negative sign.
4. The price elasticity of supply determines how much price as a result of a change in demand.
5. Over a longer time period after a price-change, the price elasticity of supply tends to decrease.
1. FALSE
2. FALSE
3. FALSE
4. TRUE
5. FALSE
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Refer to Figure 24-1. Ceteris paribus, an increase in personal income taxes would be represented by a movement from
A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A.
The market for electricians in a small town might have a different structure than in a large city because
A) cartels are legal in large cities but not in small towns. B) the small town market can only support a few electricians. C) unions are stronger in large cities than in small towns. D) None of the above.
A reduction in the government's deficit causes:
a. No change in the monetary base. b. The monetary base to either rise or fall, depending on the state of the economy. c. The monetary base to fall. d. The monetary base to rise.
Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000 . How much would a family that earned $75,000 owe?