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# worksheet_for_output - Econ 002 Determination of income and...

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Econ 002 Determination of income and output in a simple Keynesian model Y = C + I _____ If a per unit tax is imposed on the sellers, the sellers can avoid paying part of the tax a. when the supply is more inelastic b when the demand is more elastic c when the supply is more elastic d. when the demand is more inelastic e. part c and part d are correct ____ If a per unit tax is imposed on the sellers, the buyers can avoid paying most of the tax a. when the supply is more inelastic b when the demand is more elastic c when the supply is more elastic d. when the demand is more inelastic e. part a and part b are correct ___ Mike and Dwight are partners in operating a bar They wish to introduce a dance floor into the bar. Since they cannot borrow due to their terrible credit rating, Mike suggests raising the price of beer to raise revenue. Dwight suggests lowering the price to raise the revenue. Only one of them is correct. We can say a. Mike believes that the demand for beer is elastic and Dwight believes that demand for beer is inelastic b. Mike believes that the law of demand does not hole c. Dwight believes that the law of demand does not hold d. Dwight believes that the demand for beer is elastic and Mike believes that demand for beer is inelastic e. If quantity demanded of beer is not sensitive to changes in the price of beer then Dwight is correct. LSC, page 1 of 5

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Econ 002 Determination of income and output in a simple Keynesian model Y = C + I _____Some unemployment is inevitable, therefore a. we have a natural rate of unemployment what could vary over time b. frictional unemployment is inevitable c. technology changes the skill requirements for the labor force d. some unemployment is desirable e. at full employment we expect less than 100 percent of the labor force to be working
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