According to the Laffer curve, a decrease in the tax rate will increase tax revenue
A. if the economy is at the farthest point out on the curve.
B. if the economy is on the negatively sloped section of the curve.
C. no matter the location of the economy on the curve.
D. if the economy is on the positively sloped section of the curve.
Answer: B
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The derived demand curve for a resource is downward sloping because
a. the demand for products that utilize the resource is directly related to the price of the resource. b. the marginal productivity of resources will decline as their price increases. c. as the price of a resource rises, other resources will be less desirable than the higher priced resource. d. other resources will be substituted for a resource that increases in price.
We would expect the cross elasticity of demand between dress shirts and ties to be:
A. positive, indicating normal goods. B. positive, indicating complementary goods. C. negative, indicating substitute goods. D. negative, indicating complementary goods.