A country's government would like to raise the price of one its most important agricultural crops, coffee beans. Which of the following government programs will result in higher prices for coffee beans?
A) An import quota on coffee beans
B) An acreage limitation program which provides coffee bean farmers financial incentives to leave some of their acreage idle
C) An import tariff on coffee beans
D) all of the above
D
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Suppose that the demand for lava lamps is elastic, and the supply of lava lamps is inelastic. A tax of $2 per lamp levied on lava lamps will increase the price paid by buyers of lava lamps by
A. $1 B. less than $1 C. between $1 and $2. D. $2
Assume an economy begins with zero inflation, a 25 percent income tax rate, and a real interest rate of 4 percent
If inflation rises to 4 percent, the nominal interest rate becomes ________ percent and the after-tax real interest becomes ________ percent. A) 8; 6 B) 8; 2 C) 0; 1 D) 8; 4 E) 6; 2