When a per-unit tax is levied on a goods market in which supply is not perfectly inelastic but such a tax nevertheless does not give rise to any deadweight loss, consumers are made no worse off by the imposition of the tax.
Answer the following statement true (T) or false (F)
False
Rationale: The absence of a deadweight loss implies the absence of substitution effects. With supply not perfectly inelastic, we know that the price consumers pay increases -- which means consumers are made worse off. But they are worse off because of an income effect, not because of a substitution effect, and income effects do not give rise to deadweight losses.
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If labor is the only variable input, an increase in the quantity of labor:
a. does not have any effect on the quantity of output. b. causes the output to increase initially at a diminishing rate and then at an increasing rate. c. causes the output to increase at a constant rate till the last worker is hired. d. causes the output to increase initially at an increasing rate and then at a decreasing rate. e. causes the output to decrease at a constant rate till the last worker is hired.
The selling power of money is the rate at which it exchanges for goods and services
Indicate whether the statement is true or false