Which of the following would likely cause the greatest deadweight loss?
a. a tax on cigarettes
b. a tax on salt
c. a tax on cruise line tickets
d. a tax on gasoline
Ans: c. a tax on cruise line tickets
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Many fast-food restaurants have begun offering value meals with fruit or salad instead of French fries. If consumers find this idea attractive, the market demand for potatoes will most likely:
A. increase, which may result in short-run losses for potato growers. B. decrease but have no effect on the profits earned by potato growers in the short run. C. increase but have no effect on the profits earned by potato growers in the short run. D. decrease, which may result in short-run losses for potato growers.
Refer to Scenario 7.8 below to answer the question(s) that follow. SCENARIO 7.8: A swimming pool cleaning company has the following production possibilities. With one, two, three, and four workers, the company can clean 5, 12, 17, and 20 pools per day, respectively. Refer to Scenario 7.8. The average product of labor with four workers is
A. 3. B. 3.3. C. 5. D. 13.5.