The effect of the tax on the quantity sold would have been larger if the tax had been levied on consumers.
Indicate whether the statement is true or false.
Ans: False
The equilibrium quantity of wine produced, the amount consumers pay per bottle of wine, and the amount producers receive for each bottle of wine are all independent of who pays the tax. Regardless of whether the tax is levied on consumers, causing the demand curve to shift by the amount of the tax, or on producers, causing the supply curve to shift by the amount of the tax, the new quantity at which the curves intersect will be the same. Therefore, it doesn't matter whether the government imposes the tax on consumers or producers.
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Price elasticity of demand is a numerical measure of how much quantity demanded rises as price falls or quantity demanded falls as price rises.
Answer the following statement true (T) or false (F)
In which of the following situations would consideration of the minimum efficient scale of operation suggest that the market should be served by a single firm to minimize production costs?
A) When the LRAC curve slopes downward over the relevant range of output. B) When the LRAC curve hits its minimum point at a relatively low level of output and then increases and the demand for output is quite large. C) When the LRAC curve hits its minimum point at a relatively low level of output but then remains constant as the scale of operation is increased and the demand for output is quite large. D) When the LRAC curve initially increases and then decreases beyond some point.
The BIC is a statistic
A) commonly used to test for serial correlation B) only used in cross-sectional analysis C) developed by the Bank of England in its river of blood analysis D) used to help the researcher choose the number of lags in an autoregression
In a graph of the production function relating output to capital, it is not true that
A. labor supply increases as capital increases. B. the shape of the production function reflects diminishing marginal productivity. C. the marginal product of capital can be measured as the slope of the production function. D. the marginal product of capital falls as the capital stock increases.