A tax has an excess burden whenever
A. people are unable to alter their behavior to avoid paying it.
B. government seeks to raise it.
C. it raises a great deal of revenue.
D. it induces people to change their behavior.
Answer: D
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Carlos Silva, a Colombian singer, goes on tour to the United States for one month, following high American demand for his live shows. Assuming that all the show's expenses are paid by the U.S. promoters, other things equal, the U.S. tour will bring about:
a. a decreased supply of Colombian pesos in the foreign exchange market. b. an increased supply of American dollars in the foreign exchange market. c. an increased supply of Colombian pesos in the foreign exchange market. d. a decreased demand for Colombian pesos in the foreign exchange market. e. an increased demand for American dollars in the foreign exchange market.
Vipsana's Gyros House sells gyros. The cost of ingredients (pita, meat, spices, etc.) to make a gyro is $2.00. Vipsana pays her employees $60 per day. She also incurs a fixed cost of $120 per day. Calculate Vipsana's variable cost per day when she
produces 50 gyros using two workers? A) $100 B) $124.40 C) $220 D) $240