Suppose tastes for consumption now and consumption in the future have constant elasticity of substitution. It may then be the case that a tax on interest income is efficient even if savings (defined as current income not consumed) fall in response to the tax.
Answer the following statement true (T) or false (F)
True
Rationale: When consumption now and in the future are perfect complements, savings increase as a tax on interest income increases -- and the absence of substitution effects implies no deadweight loss.
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Refer to Figure 12-2. The firm breaks even at an output level of
A) Q1 units. B) Q2 units. C) Q3 units. D) Q4 units.
The production possibilities frontier of an economy is based on the assumption that the: a. amount of consumer goods produced in the economy is constant during a given year. b. quality of labor available in the economy is variable during a given year
c. patent laws applicable in the economy are constant during a given year. d. level of technology available in the economy is variable during a given year. e. economy can either produce capital goods or consumer goods during a given year.
Game theory is necessary to understand which kinds of markets? (i) perfectly competitive (ii) monopolistically competitive (iii) oligopoly (iv) duopoly (v) monopoly
a. (i) and (ii) only b. (iii), (iv), and (v) only c. (iii) and (iv) only d. (i), (ii), (iii), (iv), and (v)
Oil shocks, the shift from manufacturing to service jobs, and the use of new technologies are reasons for _____ unemployment.
Fill in the blank(s) with the appropriate word(s).