A unit tax has an advantage over an ad valorem tax in situations when _____. a. inflation is high b. it is easy to estimate the value of the good being taxed c. it is difficult to estimate the value of the good being taxed d. inflation is low ANSWER c
Date: September 9th, 2020
Provide arguments for and against education vouchers. What will be an ideal response? ANSWER Education vouchers are attractive policy options because they introduce competition into the public education system. The hope is that just like in other areas of life, choice and competition will increase the quality of goods provided and lower the cost. […]
Date: September 9th, 2020
List two economic reasons why representative democracy makes sense What will be an ideal response? ANSWER Representative democracy makes economic sense for two reasons. First, having fewer individuals involved in the decision-making process will lower the costs of making decisions. Second, there are benefits from specialization and having some individuals specialize in politics (or […]
Date: September 9th, 2020
Producers may respond to a unit tax by _____. a. increasing the value of each unit b. increasing the number of units sold c. differentiating their product line d. selling the product in bundles ANSWER a
Date: September 9th, 2020
Suppose the market for potatoes can be expressed as follows: Supply: QS = -20 + 10p Demand: QD = 400 – 20p If the government sets a maximum price of $10 per unit, what will be the quantity demanded and quantity supplied? ANSWER With a maximum price of $10, suppliers will sell only 80 […]
Date: September 9th, 2020
The relationship between education and productivity is easily quantified because causation clearly flows from education to increased productivity. a. True b. False ANSWER b
Date: September 9th, 2020
Representative democracy makes no sense from an economic point of view. a. True b. False ANSWER b
Date: September 9th, 2020
An ad valorem tax on suppliers causes the _____ to shift by a constant _____. a. supply curve; percentage b. supply curve; amount c. demand curve; percentage d. demand curve; amount ANSWER a
Date: September 9th, 2020
The above figure shows a consumer’s indifference curves for soda and all other goods. Assuming a budget of $100, derive the consumer’s demand for soda for prices of $4 and $10 per case of soda. Estimate the price elasticity of demand for soda. What will be an ideal response? ANSWER At a price of […]
Date: September 9th, 2020
An ad valorem tax on demanders causes the _____ to shift by a constant _____. a. supply curve; percentage b. supply curve; amount c. demand curve; percentage d. demand curve; amount ANSWER c
Date: September 9th, 2020
