Which of the following is true?
a. During any given year, the size of the economic pie available for allocation to individuals is fixed.
b. When the link between worker productivity and reward is weakened, individuals have less incentive to create income.
c. If they reduce income inequality, taxes and income transfers will not alter the incentive of individuals to engage in productive activity.
d. The total output of an economy is unrelated to the distribution of income.
B
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When some firms leave a perfectly competitive market, the price:
A. falls, and profits of those left rise. B. falls, and profits of those left fall. C. increases, and profits of those left rise. D. increases, and profits of those left fall.
If the price elasticity of demand for a good is 1, then a 3 percent decrease in price results in a
a. 0.1 percent increase in the quantity demanded. b. 1 percent increase in the quantity demanded. c. 3 percent increase in the quantity demanded. d. 4 percent increase in the quantity demanded.
A tariff is a tax imposed by a government on its own exports
Indicate whether the statement is true or false
Which of the following statements is TRUE of static tax analysis?
A. A government cannot change it tax revenues by changing the tax rate. B. A government receives lower tax revenues by raising the tax rate. C. A change in the tax rate can raise or lower tax revenues, depending on other factors. D. A government receives higher tax revenues by raising the tax rate.