Question

16. When a tax on a good is applied to the supplier and the supply is relatively more elastic than demand, but neither is completely elastic or completely inelastic, who pays the greater share of the tax? (select the single answer that is most correct) Group of answer choices

A. Producers pay the entire tax.

B. Consumers.

C. Producers.

D. Consumers pay the entire tax.

17. 2 pts What is the primary characteristic that determines whether the consumer or the producer pays more of a given tax on a good? (select the single answer that is most correct) Group of answer choices

A. The relative elasticity of supply and demand for the good.

B. Whether the tax is applied to the consumer or the producer by the government.

C. How high the price is.

D. The intent of the citizens.

18. 2 pts What is generally considered the result of international trade? (select the single answer that is most correct) Group of answer choices

A. Overall the domestic country suffers because those who benefit have smaller gains than the losses from those who suffer.

B. There are only winners with international trade.

C. Overall the domestic country benefits because those who benefit have greater gains than the losses from those who suffer.

D. There are only losers with international trade.

19. 2 pts Given that only capital is fixed in the short run, how is the correct long run average cost curve chosen? (select the single answer that is most correct) Group of answer choices

A. The curve that demonstrates the highest cost at the optimal quantity.

B. The curve that generates the lowest revenue at the optimal quantity.

C. The curve that generates the highest revenue at the optimal quantity.

D. The curve that demonstrates the lowest average cost at the optimal quantity.

20. 2 pts What is the general relationship between marginal cost and marginal product? (select the single answer that is most correct) Group of answer choices

A. Marginal cost increases much faster than marginal product increases.

B. As marginal product increases marginal costs decrease.

C. As marginal product increases marginal costs increase.

D. Marginal cost increases much faster than marginal product decreases.

Answer 1

16. When a tax on a good is applied to the supplier and the supply is relatively more elastic than demand, but neither is completely elastic or completely inelastic, who pays the greater share of the tax?

B. Consumers.

17. What is the primary characteristic that determines whether the consumer or the producer pays more of a given tax on a good?

A. The relative elasticity of supply and demand for the good.

18. What is generally considered the result of international trade?

B. There are only winners with international trade.

Note: With trade everyone gets better off. This is one of the principles of economics that trade makes everyone better off. Due to specialization every countries efficiency improves and they become better off.

19. Given that only capital is fixed in the short run, how is the correct long run average cost curve chosen?

D. The curve that demonstrates the lowest average cost at the optimal quantity.

Note: In the long run the firms earn zero economic profit since they operate at Minimum ATC. Thus last option is correct.

20. What is the general relationship between marginal cost and marginal product?

B. As marginal product increases marginal costs decrease.

Note: When marginal product increases it means the efficiency has increased. Hence the cost per unit decreases. The increase in marginal product means larger increase in output due to additional one unit of input that is more than the last input.

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