The ________ states that all else equal, taxes that are neutral with respect to economic decisions are generally preferable to taxes that distort economic decisions.
A. law of tax incidence
B. principle of neutrality
C. principle of second best
D. principle of excess burden
Answer: B
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Changes in the health of the average person are relatively unimportant as an indicator of changes in the standard of living
Indicate whether the statement is true or false
An increase in government expenditures that ________ the budget deficit in an example of ________
A) raises, automatic stabilization B) raises, discretionary fiscal policy C) lowers, automatic stabilization D) lowers, discretionary fiscal policy
Given the scenario described, if the market price of hammers increased from $9 to $13:
Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot can offer their hammer for a minimum of $7. Lace Hardware can offer the hammer for a minimum of $10. Bob's Hardware store can offer the hammer at a minimum price of $13. A. producer surplus would increase for each producer. B. producer surplus would increase only for House Depot. C. producer surplus would remain unchanged for Bob's Hardware. D. producer surplus would increase by $4 for Lace Hardware.
A fallacy of composition is to assume that
a. you can determine the composition of a complex product just by examining its exterior properties b. consumer durable goods today do not last as long as they did a generation ago c. any mistakes made in producing a product using an assembly line technique will lead to a compounding of errors as the product moves down the line d. what is true for any individual component in a group is true for the group as a whole e. when I was young I liked cotton candy, but now that I'm older I no longer like it