On a graph we draw a consumer's budget constraint, measuring the number of apples on the horizontal axis and the number of light bulbs on the vertical axis. If the slope of the budget constraint is -2, then
a. an apple costs twice as much as a light bulb.
b. the opportunity cost of a light bulb is 2 apples.
c. the opportunity cost of an apple is one-half of a light bulb.
d. All of the above are correct.
a
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Refer to Figure 4-21. The figure above represents demand and supply in the market for cigarettes. Use the diagram to answer the following questions
a. How much is the government tax on each pack of cigarettes? b. What portion of the unit tax is paid by consumers? c. What portion of the unit tax is paid by producers? d. What is the quantity sold after the imposition of the tax? e. What is the after-tax revenue per pack received by producers? f. What is the total tax revenue collected by the government? g. What is the value of the excess burden of the tax? h. Is this cigarette tax efficient?
Increases in the federal budget deficit from 2007 to 2009 were caused:
A. exclusively by the loss of tax revenue due to recession. B. exclusively by expansionary fiscal policy, as shown through growth in the cyclically adjusted deficit. C. primarily by a combination of recession and expansionary fiscal policy. D. primarily by increased outlays to a rapidly growing number of Social Security recipients.