The demand for cigarettes is price inelastic implying a unit tax on this commodity will
Will mainly paid by sellers of the product
By mainly paid by cigarette smokers
Be mainly paid by tobacco growers
None of the above
Correct Answer :
B. By mainly paid by cigarette smokers
Because the demand of cigarettes is inelastic so the burdens of unit tax on cigarettes are imposed on consumers. The more inelastic is demand, the greater the share of a unit tax bear by consumers. And if the more elastic is demand, the greater the share of unit tax bear by producers.}
Related Questions
Income effect operates through an increase
In nominal income
In money income
In wages
In real income because of the fall of price of a commodity
Which of the following oligopoly models is concerned with the maximization of joint profits?
Price leadership model
Bertrands model
Collusive model
Edgeworths model
Total utility and price are:
Directly related
Unrelated
Closely related
Negatively related
In monopoly, the relationship between average revenue and marginal revenue curves is as follows:
Average revenue curve lies above the marginal revenue curve
Average revenue curve coincides with the marginal revenue curve
Average revenue curve lies below the marginal revenue curve
Average revenue curve is parallel to the marginal revenue curve
The indirect utility function is a homogeneous function of:
degree one
degree zero
degree less than one
degree greater than one
In the case of an inferior commodity, the income-elasticity of demand is:
Positive
Unitary
Negative
Infinity
If the commodities X and Y are perfect substitutes then:
>
None of the above
In arriving at stable equilibrium in cournot model, if one firm decreases output the other firm will:
Also decrease it
Increase it
Remain uneffected
None of the above
Normally when price per unit of time falls:
Quantity demanded increases
Quantity demanded decreases
Quantity demanded remains constant
Quantity demanded becomes zero
The total utility is gained by consuming:
The last unit of a good
All the units of a good
The first unit of a good
The average unit of a good
Cross-elasticity of demand or cross-price elasticity between two perfect complements will be:
Negative
Positive
Infinite
Negative infinite
According to the principle of substitution?
Many goods have no effective substitutes
Nearly all goods have substitutes
The prices of substitute goods must be the same
Buyers will stop buying a good if its price rises
Cardinal approach includes arranging:
The different combinations of X and Y higher and lower without actually measuring the difference of utility between them
The different combinations of X and Y higher and lower and measuring the difference of utility between them
Different combination of X, Y and Z
None of above
The firms in non-cooperative games:
Enforce contracts
Make contracts
Make negotiations
Do not make negotiations
Market allocation fundamentally relies upon:
A system of relative prices
A belief that employees work for the good of society
Government ownership of the means of production
Moral incentives to encourage productive efficiency
The point on which the average cost is minimum in a firm, short run average cost curve will also be the minimum cost point on the firms long-run average cost curve. This is true:
Always
Never
When LAC is falling
Only at that level of output when LAC is at its minimum
The line from the origin to a point on an isoquant shows:
The wages employment ratio
The capital rent ratio
The rent labor ratio
The capital labor ratio
A dominant strategy can best be described as:
A strategy taken by a dominant firm
A strategy taken by a firm in order to dominate its rivals
A strategy that is optimal for a player no matter an opponent does
A strategy that leaves every player in a game better off
Repetition of a game (Repeated Game):
Yields the same outcome over and over
Can result in behavior that is different from what it would be if the game were played once
Is not possible
Makes cooperative games into noncooperative games
Microeconomics is also known as:
Price theory
Demand theory
Supply theory
Income theory
In monopolistic competition, if a firm lowers its price, the rival firms will:
Also lower their prices
Increase their prices
Show no reaction
None of the above
Moving down along a linear demand curve:
Demand becomes less elastic
Elasticity does not change
Demand has unitary elasticity
Demand becomes more elastic
MC is given by:
The slope of the TVC curve
The slope of the TVC curve but not the slope of the TC curve
The slope of the TC curve but not by the slope of the TVC curve
Either the slope of the TVC curve or the slope of the TC curve
If the marginal utility of apples to a consumer exceeds that of bananas then the consumer:
Is not in equilibrium
Will not buy any banana
Will buy some banana but less than he buys of apples
Is willing to pay more for apples than bananas
The slope of an iso-quant represents:
MRS
MRT
MRTS
MRPS
In case of perfect competition, TR curve rises at a:
Constant rate
Decreasing rate
Increasing rate
None of the above
The act of producing the output from more than one plant is concerned with:
Monopoly
Multi-plant monopoly
Bilateral monopoly
Price discrimination
In monopoly:
The producer will often produce a volume that is less than the amount which would maximize the social welfare.
The producer will often produce a volume that is more than the amount which would maximize the social welfare.
The consumers will often consume a volume that is more than the amount which would maximize the social welfare.
None of the above
The firm in cournot model:
face costs
face taxes
donot face taxes
donot face costs
Which of the following would be least likely to cause a consumer to eat less beef?
An increase in the price of beef
An increase in the price of lamb
A reduction in the consumers income
A reduction in the price of lamb