"For a given supply curve, the excess burden of a tax will be greater when the demand for a product is less elastic than when the demand is more elastic." This statement is
A) incorrect. The statement confuses demand with quantity demanded.
B) correct.
C) incorrect because the incidence of the tax, not the burden of the tax, is affected by the elasticity of demand.
D) incorrect. When demand is less elastic, the burden of the tax is smaller than when the demand is more elastic.
D
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To determine GDP from the production function, we need to know
A) the quantity of labor employed. B) the quantity of labor available for work. C) the unemployment rate. D) the quantity of labor supplied by firms. E) the real wage rate.
Suppose you read in the Wall Street Journal that actual investment in Mexico in 2003 was precisely the intended investment Mexican businesses had hoped to make. You would conclude that in 2003, the level of inventories in Mexico
a. had not changed but national income fell b. had not changed and national income was at its equilibrium level c. increased and national income fell d. increased along with national income e. was zero