Microeconomics

If two bundles are on the same indifference curve, then A) the consum

If two bundles are on the same indifference curve, then A) the consumer derives the same level of utility from each. B) the consumer derives the same level of ordinal utility from each but not the same level of cardinal utility. C) no comparison can be made between the two bundles since utility cannot really […]

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Date: September 9th, 2020

The statement “There is no accounting for taste” implies A) individua

The statement “There is no accounting for taste” implies A) individuals all have the same preferences. B) individuals all have different cardinal preferences but the same ordinal preferences. C) individuals all have different ordinal preferences but the same cardinal preferences. D) individuals all have different ordinal and cardinal preferences.   ANSWER D  

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Date: September 9th, 2020

Government revenue from an excise tax of a given amount is greater whe

Government revenue from an excise tax of a given amount is greater when demand is relatively inelastic than when it is relatively elastic. Indicate whether the statement is true or false   ANSWER True . The tax will result in larger quantity sold the more inelastic demand is. Since the tax is on a per […]

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Date: September 9th, 2020

Explain why a tax increase on cigarettes in one state might not lead t

Explain why a tax increase on cigarettes in one state might not lead to a substantial price increase for all consumers in that state. What will be an ideal response?   ANSWER Smuggling of non-taxed cigarettes and on-line buying where taxes don’t apply by some consumers may prevent a price increase for these consumers.  

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Date: September 9th, 2020