If the government levies a $0.25 tax per MP3 music file downloaded on buyers of MP3 music files, then the price received by sellers of MP3 music files would
a. decrease by more than $0.25.
b. decrease by exactly $0.25.
c. decrease by less than $0.25.
d. increase by an indeterminate amount.
c
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In equilibrium, the real value of household income must equal
A) the real value of output produced by firms. B) the real value of all expenditures. C) the sum of all goods produced in a year. D) net GDP.
When the U.S. minimum wage was first passed in 1938, only 56% of workers were employed in covered firms. The incomplete coverage suggests that
A) the partial equilibrium ignores the movement of workers from uncovered sectors to covered sectors. B) the decrease in employment is higher in general-equilibrium analysis. C) the general-equilibrium analysis predicts the wage in uncovered sectors will fall. D) all the workers will be worse off in both general- and partial-equilibrium analysis.