Assume that the world price of Good A is $8 per unit while its domestic price is $6, and the marginal cost incurred by domestic producers for producing one unit of Good A is $5 . If the government imposes a tax of $3 per unit on domestic producers, which of the following situations will be observed?
a. The tax will increase the price of Good A in the domestic market.
b. The tax will increase the world price of Good A.
c. The tax will decrease the profit earned by domestic producers.
d. The tax will decrease the price of Good A in the domestic market.
C
Economics
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Which of the following changes aggregate supply and shifts the aggregate supply curve?
i. change in the price level ii. change in potential GDP iii. change in the money wage rate A) i only B) ii only C) iii only D) ii and iii E) i, ii, and iii
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What functions does capital income serve in the economy?
What will be an ideal response?
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