Answer the following statement true (T) or false (F)
1) The efficiency loss of a tax is the tax revenue collected by government minus the value of the
public goods financed through the tax.
2) The greater the elasticity of demand and supply, the greater is the efficiency loss of a tax.
3) Economists agree that corporations always shift the corporate income tax to consumers by
raising product prices.
4) Although state and local taxes are highly progressive, federal taxation is predominantly
1) F
2) T
3) F
4) F
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Which of the following would not be an appropriate response to an unfavorable balance of trade for the United States?
a. increase tariffs b. appreciate the dollar c. subsidize exports d. impose import quotas e. impose exchange controls
Because gun violence is portrayed frequently on television and in movies, people mistakenly assign too high of a probability that they will fall victim to gun violence, and too low of a probability to more likely but less publicized events. This
phenomenon illustrates: A. the effect of the availability heuristic. B. that people suffer from hindsight bias. C. that events are poorly framed by the media. D. the self-serving bias at work.