When a tax on a good starts small and is gradually increased, tax revenue will
a. rise
b. fall
c. first rise and then fall
d. first fall and then rise
e. do none of the above
c. first rise and then fall
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Suppose there are two goods (X and Y). On a traditional graph of a budget line a tripling of all prices and incomes will
a. alter the slope of the budget line only. b. alter the slope of the budget line as well as the Y-intercept. c. alter the slope of the budget line as well as the X-intercept. d. leave the budget line unaltered.
Assume the economy moves from a situation with full employment to one in which the unemployment rate is higher. This can be portrayed as: a. an inward shift of the production possibilities curve
b. an outward shift of the production possibilities curve. c. a movement from a point inside the production possibilities curve to a point closer to the production possibilities curve. d. a movement from a point on the production possibilities curve to a point inside the production possibilities curve.