Assume that, over time, engineers develop new residential furnaces that can run on different types of fuels, e.g., natural gas, electricity, propane, and fuel oil, simply by flipping a switch on the furnace
How would this technological change affect the price elasticity of demand for natural gas? Why?
The price elasticity of demand for natural gas should increase as a result of an increase in the number of available substitutes for natural gas as the energy source for operating a furnace.
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The concept of scarcity indicates that:
A) most goods have no alternative uses. B) almost all goods have alternative uses. C) most decisions can be made without sacrificing alternatives. D) certain societies are able to overcome the constraints imposed by alternative uses of resources.
A local government currently has a tax base of $4 million and a tax rate of 5 percent. If the tax rate is increased to 6 percent, the tax base will decrease to $3.5 million. If the goal is to maximize tax revenues the tax rate should be
A) lowered below 5 percent. B) kept at 5 percent. C) raised to 6 percent. D) abolished.