Governments that impose sin taxes on goods they believe are harmful to the consumer may not take into account deadweight loss because:
A. producer surplus increases when sin taxes are instituted.
B. individuals are self-interest-seeking rational beings.
C. the consumer surplus that is lost may not reflect the consumer's welfare.
D. the demand curve reflects individuals' desire but not their ability to purchase.
Answer: C
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When Ford hires Ernst and Young Consulting to help Ford redesign its marketing, Ford's payment to Ernst and Young is classified as
A) an explicit cost. B) depreciation. C) an implicit cost. D) normal profit. E) economic profit.
When the number of buyers in a market changes, the market demand curve shifts even if individual demand curves do not shift.
Answer the following statement true (T) or false (F)
The Fed
A. is responsible for conducting U.S. fiscal policy. B. has 15 Federal Reserve banks and governing boards in New York and Chicago. C. is responsible for minting coins. D. distributes Federal Reserve notes, which are paper currency.
Selling a good abroad below the price charged in the home market, or at a price below the cost of production is called
A. import substitution. B. a tariff. C. a quota. D. dumping.