A sales tax on sellers a good leads to a loss of consumer surplus, but a price ceiling or a price floor on that same product will not
Indicate whether the statement is true or false
FALSE
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What effect would a reduction in the U.S. selling price of Japanese-made cars have on the U.S. demand for American-made cars?
A) No effect, because price changes affect quantity demanded, not demand. B) The demand would decrease. C) The demand would increase. D) We cannot tell unless we know the elasticities of demand for Japanese-made and American-made cars. E) We cannot tell unless we know what happened to the price of American-made cars.
The expected value of a project is always the
A) median value of the project. B) modal value of the project. C) standard deviation of the project. D) weighted average of the outcomes, with probabilities of the outcomes used as weights.
Figure 11-3
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In Figure 11-3, if person 1 and person 2 have the indicated quantities of cheese and crackers and are on the indicated indifference curves, is there the possibility of mutually beneficial trade? Explain.
What will be an ideal response?
To the extent that unions can transfer profits from unionized employers to union workers, they will
a. reduce the incentive of unionized employers to invest in fixed capital and research. b. increase employment in the unionized sector. c. reduce the incentive of nonunion firms to invest and expand their output. d. increase the productivity of labor in the long run.