Refer to Figure 15-11. Suppose the local government imposes a $2.50 per month tax on cable companies. What happens to the price charged by the cable company following the imposition of this tax?
A) The price rises from PM but it increases by an amount greater than $2.50 to reflect the monopoly's markup.
B) The price remains at PM.
C) The price rises from PM but it increases by an amount less than $2.50.
D) The price rises from PM to (PM + $2.50).
B
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You view tea and scones as perfect complements, and you prefer to consumer one cup of tea with one scone. Also, your indifference curves are plotted with tea on the vertical axis
If you presently have two cups of tea and one scone, what this the marginal rate of substitution (MRS) at this point? A) +1 B) -1 C) Zero D) Infinity
Which of the following statements is (are) true?
A) When total utility reaches a maximum, marginal utility is zero. B) The marginal rate of substitution is always negative. C) Indifference curves never intersect. D) All of the above.
If the economy is operating on the long-run aggregate supply curve, then expansionary fiscal policy will
A. generate an increase in real GDP without higher prices in the short run, but then real GDP will return to its long-run level, and the price level will increase. B. generate higher prices in the short run, but will induce aggregate supply to increase in the long run. C. generate an increase in real GDP and higher prices in both the short run and the long run. D. generate an increase in real GDP and higher prices in the short run, but then real GDP will decrease to its long-run level, and the price level will increase some more.
Workers bear the bulk of the payroll tax when labor supply is very elastic.
Answer the following statement true (T) or false (F)