How would the market for coffee be affected if the government charged an excise tax of $2.00 on each unit of coffee sold?
A. The demand for coffee would decrease.
B. The supply curve would shift up vertically by $2.00.
C. There would be a shortage of coffee.
D. The demand for coffee would increase.
Answer: B
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_____ refers to an enforceable set of promises to take certain actions over the future
a. A bond b. A contract c. A capitation fee d. A collusion
Back to the text: Amar is a safekeeper of people's gold (their money). He is a smart businessman who does not gamble and keeps 20 percent of the deposited gold on reserve to handle the transactions demands of depositors. Amar holds to a sound
a. excess reserve depletion rate b. liquidity of money c. volatility of money d. fractional reserve rule e. quantity theory of money
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a. True b. False Indicate whether the statement is true or false
The fact that any Pareto-efficient equilibrium can be achieved through competition by adjusting endowments is called
A) the Second Welfare Theorem. B) the First Welfare Theorem. C) the Third Welfare Theorem. D) That is not possible.