Question

In: Economics

1)A sales tax is imposed on the sellers of gasoline. This tax shifts A the supply...

1)A sales tax is imposed on the sellers of gasoline. This tax shifts

A the supply of gasoline curve rightward.

B.the demand for gasoline curve leftward.

C.the supply of gasoline curve leftward.

D.both the supply curve of gasoline and demand curve for gasoline leftward.

2) in general, a fine on selling a product leads to the

A.demand curve shifting leftward.

B.supply curve shifting rightward.

C.supply curve shifting leftward.

D.demand curve shifting rightward

3) A natural monopoly occurs when

A.a few firms collude to act as a single firm.

B.one firm can supply the entire market at a lower price per unit than two or more firms can.

C.one firm owns all the vital resources needed to produce a particular good.

D.one firm captures all the consumer surplus.

If a natural monopoly is broken up into many smaller firms then

A.the average total costs of production will increase.

B.the price will decrease.

C.efficiency will increase.

D.None of the above because it is illegal to break up a natural monopoly into smaller firms.

A good or service or a resource is nonexcludable if

it is not possible to prevent someone from benefiting from it.

it is possible to prevent someone from enjoying its benefits.

its use by one person decreases the quantity available for someone else.

its use by one person does not decrease the quantity available for someone else.

Solutions

Expert Solution

1) Option C. A sales tax on suppliers increases cost which reduces the supply and hence the supply curve shifts to left

2) Option A. This reduces the demand and hence the demadn curve shifts to left

3) Option C. Natural monopoly arises when a firm can supply goods at lower costs

4) Option A. Splitting up the natural monopoly would increase the average costs of production which makes consumes to pay more as the fixed costs will be realtively hihger than the variable costs

5) Option A

Rahul Sunny answered 1 year ago

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