The graph shown demonstrates a tax on buyers. Which of the following can be said about the effect of this tax?
A. The tax creates a shortage, and rationing must occur.
B. The tax creates a surplus, and the government must buy the excess.
C. The tax creates a shortage, and the government must regulate the market.
D. None of these is true
D. None of these is true
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A lottery promises a $250,000 prize. But the prize money is paid out in $50,000 annual installments with the first installment received today. The winner is offered the option of an immediate lump-sum payment. If the interest rate remains at 10 percent for the entire period, what is the smallest amount the winner should accept?
A. $189,540 B. $192,970 C. $208,494 D. $225,000
When the Fed practices contractionary monetary policy, the interest rate goes:
A. up, and the exchange rate will appreciate as a result. B. up, and the exchange rate will depreciate as a result. C. down, and the exchange rate will appreciate as a result. D. down, and the exchange rate will depreciate as a result.
The short-run aggregate supply curve shows a(n) _____
Fill in the blank(s) with the appropriate word(s).
Economists develop models to
A. make their arguments more realistic. B. help us understand economic phenomena in the real world. C. justify the assumptions they make about people's behavior. D. capture every detail of the real world.