Suppose the demand for barley is perfectly elastic. The supply curve of barley is upward sloping. If a tax is imposed on barley,
A) barley sellers pay the entire tax.
B) barley buyers pay the entire tax.
C) the government pays the entire tax.
D) the tax is split evenly between barley buyers and sellers.
E) who pays the tax depends on whether the government imposes the tax on barley sellers or on barley buyers.
A
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At harvest time the supply of wheat is perfectly inelastic. If the government taxes wheat at $1 a bushel, then
A) the seller pays the entire tax. B) the buyer pays the entire tax. C) the seller and the buyer split the tax evenly. D) the seller and the buyer split the tax but the seller pays more. E) no one pays the tax because the wheat must be harvested or it will go to waste.
In the U.S., one example of a cartel that is legal is
A) the railroads, including Union Pacific. B) the oil industry. C) Major League Baseball. D) None, all cartels are prohibited.
For a given aggregate supply curve, an increase in aggregate demand will: a. decrease the real interest rate
b. increase real GDP. c. decrease the price level. d. increase the real exchange rate. e. decrease real GDP.
Prior to Keynes, the prevailing viewpoint concerning equilibrium in the economy was that of
a. supply-side economics. b. monetarism. c. classical economics. d. depression economics.