Explain the excess burden of a tax on luxury yachts
A tax on luxury yachts, say of $1,000 . will cause some potential buyers to switch to their next best alternative. Perhaps the individuals will invest in diamonds. But they will be worse off, because they are now consuming a less preferred option. This is the excess burden.
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The aggregate demand curve shows the
A) total amount of nominal goods that the participants in the economy want to purchase. B) amount of goods producers will produce as production costs fall. C) total amount of real goods that foreigners want to purchase. D) total amount of planned expenditures on goods and services at each possible price level.
When firms incur unplanned inventories, they typically
a. build new plants. b. call for more government spending. c. hire more workers and increase production. d. lay off workers and reduce production.
A firm sells an identical product to two groups of consumers, A and B. The firm has decided that third-degree price discrimination is feasible and wishes to set prices that maximize profits
Which of the following best describes the price and output strategy that will maximize profits? A) PA = PB = MC. B) MRA = MRB. C) MRA = MRB = MC. D) (MRA - MRB) = (1 - MC).
According to evidence provided by the U.S. government, the median black
a. man earns more than the median black woman. b. woman earns less than the median white woman c. man earns less than the median white man. d. All of the above are correct.