The supply curve for whiskey is the typical upward-sloping straight line, and the demand curve for whiskey is the typical downward-sloping straight line. When whiskey is taxed, the area on the relevant supply-and-demand graph that represents
a. government's tax revenue is a rectangle.
b. the deadweight loss of the tax is a triangle.
c. the loss of consumer surplus caused by the tax is neither a rectangle nor a triangle.
d. All of the above are correct.
d
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If the economy is falling below potential real GDP, which of the following would be an appropriate fiscal policy to bring the economy back to long-run aggregate supply? An increase in
A) the money supply and a decrease in interest rates. B) government purchases. C) oil prices. D) taxes.
Which of the following is not true?
A. A monopolist typically seeks to maximize profits. B. Economies of scale are the cause of natural monopolies. C. A monopolist can set price at arbitrarily high levels. D. Monopolists price on the elastic portion of their demand curves.