Refer to the below graph. Assume the market for this product is in equilibrium at the intersection of D2 and S1. The shift in supply from S1 to S2 is due to an excise tax imposed on the product. The incidence of the tax is:
A. $1 from the buyers and $3 from the sellers
B. $3 from the buyers and $3 from the sellers
C. $1 from the buyers and $1 from the sellers
D. $4 from the buyers and $0 from the sellers
A. $1 from the buyers and $3 from the sellers
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The classical model is a model in which
a. governmental policies are needed to ensure full employment. b. wages and prices are perfectly flexible. c. the public has perfect information. d. None of the above e. b and c
Which of the following is true? a. A depression is a recession that is mild and relatively brief
b. The expansions and contractions of real world business cycles last varying lengths of time and often differ in magnitude. c. The timing of business fluctuations is regular and therefore easily predictable. d. During the contractionary phase of the business cycle, the rate of unemployment is generally quite low.