Damage from floods and hurricanes which destroy a large portion of this year's crop of oranges will definitely make oranges more price inelastic in supply.
Indicate whether the statement is true or false
Ques. 2A regressive income tax is defined as a tax for which
A) total taxes paid increase with the level of income.
B) total taxes paid are independent of the level of income.
C) the average tax rate increases with the level of income.
D) the average tax rate decreases with the level of income.
Ques. 3Dustin's copy shop can use four alternative plants. The figure above shows the average total cost curves for Plant 1 (ATC1), Plant 2 (ATC2), Plant 3 (ATC3), and Plant 4 (ATC4). Dustin's Plant 2 will be economically efficient if the firm produces
A) 2,000 copies per day.
B) 4,800 copies per day.
C) 5,300 copies per day.
D) 6,000 copies per day.
Ques. 4In the above figure, what would be the wage paid and quantity of labor employed under competitive market conditions compared to monopsony conditions?
A) W1 and L1 with competition versus W2 and L2 with monopsony
B) W2 and L2 with competition versus W1 and L1 with monopsony
C) W2 and L2 with competition versus W3 and L1 with monopsony
D) W3 and L3 with competition versus W3 and L1 with monopsony
Ques. 5Bart consumes food and clothing, which are both normal goods. Suppose that the price of food falls. The substitution effect of this price decrease is ________ and the income effect of this price decrease is ________.
A) that Bart buys more clothing and less food; that Bart buys more of both food and clothing
B) reflected by a change in the relative prices of food and clothing; is represented by a movement along the original indifference curve
C) reflected by a parallel shift outward of the budget line; that Bart earns more money each month
D) reflected by the change in the slope of the budget line; that Bart has greater purchasing power
Ques. 6The benefit from an additional unit of a good or service that society receives from the consumption of that good or service is the
A) marginal private benefit.
B) marginal external benefit.
C) marginal social benefit.
D) opportunity cost.
Ques. 7In the above figure, the curve labeled MCL is the marginal cost of labor curve and is used in a
A) competitive situation in which individual firms cannot influence the wage rate they must pay.
B) competitive situation in which skill differentials create a difference between what a firm must pay labor versus the wage at which households are willing to supply labor.
C) monopsony situation in which the firm can influence wages by how much labor it hires, so that the wage rate received by workers is less than the marginal cost of labor.
D) monopsony situation in which the firm can influence wages by how much labor it hires, so that the wage rate received by workers is greater than the marginal cost of labor.
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