In the above figure, the imposition of a $0.25 sales tax on sellers will
A) raise the market price paid by buyers of hotdogs by $0.25.
B) lower the market price paid by buyers of hotdogs by $0.25.
C) raise the market price paid by buyers of hotdogs by $0.125.
D) have no effect on the market price of hot dogs.
D
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Which of the following statements is correct?
a. Monopolistic competition is similar to monopoly because both market structures are characterized by firms being price makers rather than price takers. b. Monopolistic competition is similar to perfect competition because both market structures are characterized by differentiated products. c. Monopolistic competition is similar to oligopoly because both market structures are characterized by strategic interaction between firms in the market. d. Monopolistic competition is similar to perfect competition because both market structures are characterized by perfectly elastic demand curves for firms.
In 2009 President Obama and Congress increased government spending. Some economists thought this increase would have little effect on output. Which of the following would make the effect of an increase in government expenditures on aggregate demand smaller?
a. the MPC is small and changes in the interest rate have a small effect on investment b. the MPC is small and changes in the interest rate have a large effect on investment c. the MPC is large and changes in the interest rate have a small effect on investment d. the MPC is large and changes in the interest rate have a large effect on investment