When the government imposes a tax on a good, total economic surplus will:

A. never change.
B. always fall.
C. only increase if the good entails a positive externality.
D. only increase if the good entails a negative externality.


Answer: D

Economics

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The statement that "IBM's stock closed at $85" is

a. a normative statement b. a positive statement c. a macroeconomic observation d. financial manipulation e. a sign that the market may be undervalued

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A monopolistically competitive firm is currently producing 20 units of output. At this level of output the firm is charging a price equal to $20, has marginal revenue equal to $12, has marginal cost equal to $12, and has average total cost equal to $18 . From this information we can infer that

a. the firm is currently maximizing its profit. b. the profits of the firm are negative. c. firms are likely to leave this market in the long run. d. All of the above are correct.

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The APS in the United States is generally

A. below .01 B. between .01 and .07. C. between .15 and .25. D. between .7 and .75.

Economics