If the government places a $0.50 tax on an item for which demand is perfectly elastic
A) the entire tax will be paid by the consumer.
B) the tax will be split equally between the consumer and producer, with each paying exactly $0.25.
C) most of the tax will be paid by the consumer.
D) the entire tax will be paid by the producer.
D
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If total utility increases by smaller and smaller amounts as more units of a product are consumed, then marginal utility is:
a. decreasing and is a negative amount. b. decreasing and is a positive amount. c. zero. d. increasing and is a negative amount. e. increasing and is a positive amount.
Assume a purely competitive decreasing-cost industry is initially in long-run equilibrium but then there is a decrease in consumer demand. After all economic adjustments to this new situation have taken place, product price will be:
A. Higher, but total output will be lower B. Lower, and total output will be lower C. Higher, and total output will be higher D. Lower, but total output will be higher