Use the following graph for a competitive market to answer the question below.
Assume the government imposes a $3 tax on buyers, which results in a shift of the demand curve from D1 to D2. The amount of the tax paid by the seller is
A. $3.
B. $1.
C. $2.
D. $8.
Answer: C
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Which of the following changes would NOT shift the aggregate demand curve?
A) a change in fiscal policy B) a change in monetary policy C) a change in expectations about future income D) an increase in technology
Which of the following is not a characteristic of a monopolistically competitive firm in long-run equilibrium?
A) Price is equal to average revenue. B) The firm has excess capacity. C) Marginal revenue is equal to marginal cost. D) Price is equal to marginal cost.
If there is initially a federal budget deficit, and taxes rise, while transfer payments fall:
a. AD increases and the budget deficit increases. b. AD increases and the budget deficit decreases. c. AD decreases and the budget deficit increases. d. AD decreases and the budget deficit decreases.
When a variable that is not named on either axis of a graph changes, we read the change as a movement along the curve
a. True b. False Indicate whether the statement is true or false