If oil refiners expect the government to tax away any profits created by international supply disruptions, refiners will choose to
A) carry smaller inventories of crude petroleum.
B) leave the oil refining business.
C) prevent the price of crude petroleum from rising.
D) raise their prices to cover their added risks.
E) take a higher percentage of their profits as windfalls.
A
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Consider that you are a government economist asked by a state legislature to apply excise taxes to a variety of goods sold in your state. You know you want to minimize the excess burden of taxation so you apply the Ramsey Rule
This means that you tell the legislature to _____. a. set the tax rates proportional to the elasticities of demand for each good b. set the tax rates in inverse proportion to the elasticities of demand for each good c. set the tax rates proportional to the elasticities of supply for each good d. set the tax rates in inverse proportion to the elasticities of supply for each good
Each of the following factors might interfere with the efficiency of perfect competition except:
a. increasing returns to scale. b. imperfect price information. c. externalities. d. diminishing returns to scale.