Questions from General Economics

Q: Explain the benefits principle and the ability-to-pay principle

Explain the benefits principle and the ability-to-pay principle. What are vertical equity and horizontal equity? Why is studying tax incidence important for determining the equity of a tax system?

Q: Your cousin Vinnie owns a painting company with fixed costs of $

Your cousin Vinnie owns a painting company with fixed costs of $200 and the following schedule for variable costs: Calculate average fixed cost, average variable cost, and average total cost for eac...

Q: The city government is considering two tax proposals: • A

The city government is considering two tax proposals: • A lump-sum tax of $300 on each producer of hamburgers. • A tax of $1 per burger, paid by producers of hamburgers. a. Which of the following curv...

Q: Jane’s Juice Bar has the following cost schedules: /

Jane’s Juice Bar has the following cost schedules: a. Calculate average variable cost, average total cost, and marginal cost for each quantity. b. Graph all three curves. What is t...

Q: Consider the following table of long-run total costs for three

Consider the following table of long-run total costs for three different firms: Does each of these firms experience economies of scale or diseconomies of scale?

Q: Your aunt is thinking about opening a hardware store. She estimates

Your aunt is thinking about opening a hardware store. She estimates that it would cost $500,000 per year to rent the location and buy the stock. In addition, she would have to quit her $50,000 per yea...

Q: A commercial fisherman notices the following relationship between hours spent fishing and

A commercial fisherman notices the following relationship between hours spent fishing and the quantity of fish caught: Hours…………..Quantity of Fish (in pounds) 0 ………………………………………………………0 1 …………………………………...

Q: Nimbus, Inc., makes brooms and then sells them door to

Nimbus, Inc., makes brooms and then sells them door to-door. Here is the relationship between the number of workers and Nimbus’s output in a given day: a. Fill in the column of mar...

Q: Consider the following cost information for a pizzeria: /

Consider the following cost information for a pizzeria: a. What is the pizzeria’s fixed cost? b. Construct a table in which you calculate the marginal cost per dozen pizzas using t...

Q: Draw the marginal-cost and average-total-cost curves

Draw the marginal-cost and average-total-cost curves for a typical firm. Explain why the curves have the shapes that they do and why they cross where they do.