When the price of a good is a constant, the marginal revenue per unit of output is the same as:
a. total revenue.
b. average total cost.
c. price.
d. quantity of output.
e. profit per unit.
QUESTION 2If a government tax has as its purpose the raising of revenue, it would be best to place the tax on a product which:
a. is a non-essential.
b. has a highly elastic demand.
c. has many good substitutes.
d. has a highly inelastic demand.
e. has a unit elastic demand curve.
QUESTION 3Under perfect competition, no matter how much output is produced, the total revenue curve is:
a. a positively-sloped line.
b. a negatively-sloped line.
c. a horizontal straight line.
d. a U-shaped curve.
e. a hill-shaped curve.
QUESTION 4If the government wants to raise tax revenue and shift most of the tax burden to the sellers, it would impose a tax on a good with a:
a. steep (inelastic) demand curve and steep (inelastic) demand curve.
b. steep (inelastic) demand curve and a flat (elastic) supply curve.
c. flat (elastic) demand curve and a steep (inelastic) supply curve.
d. flat (elastic) demand curve and a flat (elastic) supply curve.
QUESTION 5Marginal revenue is the change in:
a. total profit brought about by selling one more unit of output.
b. price brought about by selling one more unit of output.
c. total revenue brought about by selling one more unit of output.
d. output brought about by a 1 change in product price.
e. average revenue brought about by selling one more unit of output.
QUESTION 6Assuming the demand curve is more elastic (flatter) than the supply curve, which of the following is true?
a. The full tax is always passed to the consumer no matter how flat (elastic) the demand curve is.
b. The full tax is always passed to the seller no matter how flat (elastic) the demand curve is.
c. The smaller the portion of a sales tax that is passed to the consumer.
d. It does not make any difference how flat (elastic) the demand curve is; the tax is always split evenly between buyer and seller.
QUESTION 7If a perfectly competitive firm sells 10 units of output at a market price of 5 per unit, its marginal revenue per unit is:
a. 5.
b. 50.
c. more than 5 but less than 50.
d. less than 5.
Quick Reply
