A one-dollar tax reduction has the same effect as a one-dollar increase in government purchases
a. True
b. False
Indicate whether the statement is true or false
False
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Suppose a tax is imposed on a good. This will
A) increase the price paid by the buyer and decrease the price received by the seller. B) increase the price paid by the buyer but leave the price received by the seller unchanged. C) decrease the price received by the seller but leave the price received by the buyer unchanged. D) increase the price received by the seller and decrease the price paid by the buyer.
The above figure shows the utility of wealth curve for a homeowner whose only possession is a $50,000 house. If there is a 20 percent chance that the home could be completely destroyed, would this homeowner buy insurance?
A) No, because the homeowner is not risk averse. B) Yes, at any price because the homeowner is risk averse. C) Yes, but only if it costs less than $10,000. D) Yes, but only if it costs less than $20,000.
Suppose the price of a product is less than its average variable cost. When the firm's fixed obligations are completely ended, it will now most likely
a. make an economic profit b. go out of business c. expand to a bigger operation d. continue to be shut down e. break even
Which of the following observations concerning the Phillips curve is not true?
a. They are normally upward-sloping. b. They are more commonly constructed for price inflation. c. They depict the inverse relation between wage inflation and unemployment. d. They depict the rate of unemployment on the horizontal axis.