To prevent obesity, the government may establish a tax on high caloric foods, such as twinkies. A twinkie tax will have the smallest impact on quantity demanded when the demand curve for twinkies is
A) perfectly elastic.
B) perfectly inelastic.
C) more elastic than the supply curve.
D) both A and B.
B
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A lump-sum tax:
A. takes the same percentage of taxes from income from all taxpayers. B. requires those with low incomes to pay a smaller percentage of their income than high-income people. C. is levied so that low-income taxpayers pay a greater proportion of their income toward taxes than high-income taxpayers. D. taxes everyone the same amount, regardless of their income.
If a $10 trillion economy is growing at a real rate of 2.5 percent a year, what must this economy do to maintain a constant debt-to-GDP ratio?
A. Have increasingly smaller deficits B. Maintain a balanced budget C. Run increasingly larger surpluses D. Have increasingly larger deficits
When the wage rate is $10 per hour and the MPP of a worker is 15 units per hour, the unit labor cost is
A. $10.00 per hour. B. $0.67 per unit. C. $150.00 per hour. D. $15.00 per unit.
Refer to the above figure. It represents supply and demand for The Black Ash Steel Company's output. The firm's plant belches large quantities of smelly fumes and black ash into the air. Residents in the surrounding area have higher medical bills as a result. If the firm is forced to pay the full social cost of its production, what will occur?
A. Black Ash will increase its own output to cover the cost increase. B. Black Ash's supply curve will shift from SA to SB. C. The company's supply curve will shift from SB to SA. D. Demand for the firm's steel will shift to the left.