Suppose that the elasticity of demand for insulin is 0.1, the elasticity of demand for oranges is 1.2, and the elasticity of supply for insulin and oranges is 0.4
If the government imposes a 10 percent tax on both insulin and oranges, the decrease in the quantity of oranges is ________ the decrease in the quantity of insulin. A) larger than
B) smaller than
C) equals to
D) not comparable to
E) More information is needed to determine how the decrease in the quantity of oranges compares to the decrease in the quantity of insulin.
A
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The Keynesian framework indicates that government can play an important role in determining aggregate output by
A) changing the level of government spending or taxes. B) raising consumer confidence. C) raising investor confidence. D) changing the money supply and interest rates.
Which of the following statements is TRUE about the difference between a public and private good?
A) Both public and private goods are owned by individuals but public goods can be shared while private goods cannot be shared. B) The government produces private goods while corporations produce public goods. C) Consumption of a private good by one person reduces the amount available for others while the consumption of a public good does not reduce the amount available for others. D) Resources are used to produce private goods but are not used to produce public goods.