Neither the supply of nor demand for a good is perfectly elastic or perfectly inelastic. So, imposing a tax on the good results in ________ in the price received and kept by sellers and a ________ in the price paid by buyers
A) a rise; rise
B) a rise; fall
C) a fall; rise
D) a fall; fall
E) no change; rise
C
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With rent seeking by a monopoly
A) the monopolist's average total costs will increase so that its average total cost curve is tangent to the demand curve at the profit-maximizing price. B) a monopoly uses all of what would be its economic profit to prevent other firms from taking its economic rent. C) the full deadweight loss of monopoly is larger than in the absence of rent seeking. D) All of the above answers are correct.
If a firm fired one worker and lost 12 units of production and decides to add one more unit of capital, then to remain on the same isoquant what must be TRUE?
A) The MPK of the next unit of capital added equals 12. B) The firm must force the other workers to work more. C) The firm will experience a decline in output. D) The marginal rate of technical substitution is greater than 12.
Equal increases in government spending and taxes will exactly offset each other, leaving the equilibrium level of output unchanged
Indicate whether the statement is true or false
During economic slowdowns (recessions) the velocity of money tends to:
A. increase dramatically. B. increase slightly. C. decrease. D. remain relatively stable.