Refer to Figure 4-11. Suppose the market is initially in equilibrium at price P1 and then the government imposes a tax on every unit sold. Which of the following statements best describes the impact of the tax?
A) The consumer will bear a greater share of the tax burden if the demand curve is D2.
B) The consumer will bear a greater share of the tax burden if the demand curve is D1.
C) The consumer will bear the entire burden of the tax if the demand curve is D1 and the producer will bear the entire burden of the tax if the demand curve is D2.
D) The consumer's share of the tax burden is the same whether the demand curve is D1 or D2.
A
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Using the data in the above table, the equilibrium quantity and equilibrium price for a cellular telephone is
A) 50 thousand and $100. B) 80 thousand and $80. C) 60 thousand and $50. D) 40 thousand and $20.
Which expression below matches most closely the way economists go about testing their models?
A) "Consistency is the hobgoblin of small minds." B) "Seeing the results is the only way to know if you are right." C) "A bird in the hand is worth two in the bush." D) "In the long run we are all dead."