If income increases due to a decrease in taxes, then
A) utility will increase because consumers can afford a larger bundle of goods.
B) utility will fall because consumers will be forced to buy a smaller bundle of goods.
C) utility will remain constant.
D) utility will increase because consumers will be forced to buy a smaller bundle of goods.
A
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The demand curve faced by a perfectly competitive firm
A. has unitary elasticity. B. is identical to the market demand curve. C. yields constant total revenues even when price changes. D. is the same as its marginal revenue curve.
A positive externality or spillover benefit (additional social benefit) occurs when
A. the benefits associated with a product exceed those that accrue for consumers. B. firms earn positive economic profits. C. a firm does not bear all of the costs of producing a good or service. D. product differentiation increases the variety of products available to consumers.
If you withdraw currency from your checking account for cash, you are
A) increasing M1, decreasing M2. B) increasing both M1 and M2. C) decreasing both M1 and M2. D) not affecting M1 or M2. E) increasing M1 but not affecting M2.
An example of a Pigovian tax would be a tax on:
A. cigarettes. B. alcohol. C. gasoline. D. All of these are examples.