To fully understand how taxes affect economic well-being, we must compare the
a. benefit to buyers with the loss to sellers.
b. price paid by buyers to the price received by sellers.
c. profits earned by firms to the losses incurred by consumers.
d. decrease in total surplus to the increase in revenue raised by the government.
d
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Which of the following statements correctly describes a competitive market?
A) Buyers and sellers negotiate prices before making exchanges. B) The market price for the same good varies from seller to seller. C) Sometimes, a single seller has the ability to dictate the market price. D) The market price is determined by the interaction of demand and supply.
The small-firm effect refers to the
A) negative returns earned by small firms. B) returns equal to large firms earned by small firms. C) abnormally high returns earned by small firms. D) low returns after adjusting for risk earned by small firms.