In which of the following instances would the deadweight loss of the tax on cartons of cigarettes increase by a factor of 9?
a. The tax on cartons of cigarettes increases from $10 to $11.11.
b. The tax on cartons of cigarettes increases from $10 to $20.
c. The tax on cartons of cigarettes increases from $10 to $30.
d. The tax on cartons of cigarettes increases from $10 to $90.
c
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Consider the market for purple magic markers. The demand for purple magic markers is perfectly elastic and the supply curve is upward sloping
If sellers of purple magic markers are taxed $1 per marker, how will the tax be divided between the buyer and seller? A) The sellers will pay the entire tax. B) The buyers will pay the entire tax. C) The tax will be evenly divided between the sellers and buyers. D) More information is needed to determine how the tax is split.
Higher expected profits and business confidence ________ investment spending
A) decrease B) increase C) do not affect D) none of the above.