If oranges and grapefruit are close substitutes, an increase in the price of oranges will shift the demand curve of
a. both products to the right.
b. both products to the left.
c. grapefruit to the right.
d. oranges to the left.
c
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Suppose one goal of the tax system was to achieve vertical equity. While people may disagree about what is "equitable," based on the marginal tax rates given for the two years, which of the following statements is true?
a. Vertical equity is possible in both years. b. Vertical equity is possible in 2009 but not in 2010. c. Vertical equity is not possible in 2009 but is possible in 2010. d. Vertical equity is not possible in either year.
If prices in the United States fall relative to Japan, then the:
a. Dollar depreciates because U.S. imports from Japan fall, and U.S. exports to Japan rise. b. Yen depreciates because U.S. imports from Japan fall, and U.S. exports to Japan rise. c. Yen depreciates because U.S. imports from Japan fall, and U.S. exports to Japan fall. d. Yen depreciates because U.S. imports from Japan rise, and U.S. exports to Japan fall. e. Change in the value of the dollar or yen is uncertain because exports and imports rise.
Which of the following statements is correct?
a. The average tax rate gauges the sacrifice made by a taxpayer, whereas the marginal tax rate gauges the distortion of taxes on consumer decisions. b. The marginal tax rate gauges the sacrifice made by a taxpayer, whereas the average tax rate gauges the distortion of taxes on consumer decisions. c. The average tax rate measures how much the tax system discourages people from working. d. The marginal tax rate measures total taxes paid divided by total income.
One reason that companies use the foreign-exchange market is to diversify their expenses from other sources.
a. true b. false