See the information in Scenario 4.4. Suppose P = 10, Pc = 100, Pd = 2, A = 5, and I = 50. What is the price elasticity of demand?
A) 0
B) -5/9
C) -1
D) -9/5
E) none of the above
B
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Explain how a value-added tax (VAT) works and how it differs from a sales tax. What impact does a VAT have on government revenue and the price of products paid by consumers?
Taxes on alcohol and tobacco are often referred to as “______ taxes.”
a. flat b. vertical c. sin d. progressive
When Exxon Mobil reports record profits of more than $10 billion per quarter, we know
A) other oil companies must be struggling. B) consumers must be paying high prices at the pump. C) consumers must have lost $10 billion in surplus. D) all of the above. E) none of the above follow from the information given.
Which of the following would cause labor's share of national income to increase?
A) Labor productivity increases less rapidly than the real wage rate. B) Labor productivity increases more rapidly than the real wage rate. C) Labor productivity has increased at the same rate as the real wage rate. D) Labor's share of national income is not affected by the relative growth rates of labor productivity and the real wage rate.