A unit tax
A) is based on the value of the good being sold.
B) is a constant tax assessed on each unit of a good sold.
C) is the primary tax studied in dynamic tax analysis.
D) does not influence equilibrium price and quantity.
Ques. 2Q: How many economists does it take to screw in a light bulb? A: None. If the light bulb really needed changing, market forces would have already caused it to happen. This joke represents the view of
A) classical economists.
B) Keynesian economists.
C) economists who conclude that money illusion is widespread.
D) economists who conclude that wages and prices are inflexible.
Ques. 3Which of the following would cause a change in the quantity demanded of a product?
A) a higher price
B) a higher income
C) expectations of future price increases
D) All of the above are correct.
Ques. 4Suppose an industry has total sales of 25 million per year. The two largest firms have sales of 6 million each, the third largest firm has sales of 2 million, and the fourth largest firm has sales of 1 million.
The four-firm concentration ratio for this industry is A) 36 percent.
B) 60 percent.
C) 50 percent.
D) 25 percent.
Ques. 5Frictional unemployment will always exist since
A) some workers will always want to make a job transition.
B) the capitalist system promotes unemployment.
C) mismatches in skills will always exist.
D) the U.S. economy will continue to shrink.
Ques. 6If a price ceiling is set above the current market clearing price, then
A) a surplus must immediately occur.
B) a shortage must immediately occur.
C) there will be incentives for black markets to develop.
D) quantity demanded will remain equal to quantity supplied at the current market clearing price.
Ques. 7A congressman states, If a government attempts to increase employment through increased government spending, all we will end up with is a higher price level. This congressman assumes that the
A) aggregate demand curve is a horizontal line.
B) aggregate demand curve is a vertical line.
C) aggregate supply curve is a horizontal line.
D) aggregate supply curve is a vertical line.
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