Many economists believe a general sales tax (particularly on items such as food) takes a larger proportion of income from low-income households than from high-income households. If this is true, a general sales tax is a
a. regressive tax.
b. proportional tax.
c. neutral tax.
d. progressive tax.
A
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Generally, negative externalities result in
A. too much of a good being produced. B. the socially optimal output of a good being produced. C. too little of a good being produced. D. either a or c E. any of the above
Which of the following is a potential solution to help low-income countries reduce their greenhouse gas emission?
a. The European Union relaxing strict guidelines for low-income countries’ emissions b. Reducing the emissions allowed by high-income countries c. High-income countries paying for some of the costs associated with reducing the emissions d. Imposing new, stricter emissions guidelines for low-income countries
Which of the following is not a necessary condition for effective price discrimination?
a. The firm must face a downward-sloping demand curve. b. There must be at least two distinguishable groups of consumers. c. The producer must be a pure monopolist. d. The seller must be able to prohibit buyers from easily reselling the product to other potential buyers.
Monetarists believe:
A. the cause-and-effect relationship hypothesized by the Keynesians understates the impact of stimulative monetary policy. B. the cause-and-effect relationship hypothesized by the Keynesians is an accurate description of how monetary policy works. C. since the economy is operating at full employment, any stimulative monetary policy will cause the inflation rate to rise. D. the cause-and-effect relationship hypothesized by the Keynesians is backwards, and decreases in the money supply actually stimulate economic activity.