2) Identify which one of the following is a normative statement:
A. . the high temperature today was 35 degrees.
B. . it was hotter today than yesterday.
C. . a kilogram of shrimp is more expensive than a kilogram of potato in the supermarket.
D. . shrimp is more delicious than potato.
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1) If the price of oil, a close substitute for coal, increases, then
A. . the supply curve for coal will shift to the right.
B. . the demand curve for coal will shift to the right.
C. . the equilibrium price and quantity of coal will not change.
D. . the quantity of coal demanded will decline.
If the size of a tax increases, tax revenue will
A. . increase.
B. . decrease.
C. . remain the same.
D. . increase, then decrease.
The greater the elasticities of demand and supply the
A. . smaller the deadweight loss from a tax.
B. . less intrusive a tax will be on a market.
C. . greater the deadweight loss from a tax.
D. . more equitable the distribution of a tax between buyers and sellers.
The size of the tax and the deadweight loss of a tax are
A. . positively related.
B. . negatively related.
C. . independent of each other.
D. . equal to each other.
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