If the government charged a tax on monopolists equal to, say, 75 percent of their economic profits, what would happen to the level of output the firm would produce? What about the price? Explain
There would be no effect on the price or output level. This is an example of a change in fixed cost, and has no impact on the marginal cost or marginal revenue. Therefore, the firm would have no incentive to change price or quantity. Note, however, that it would suffer a reduction in the level of profits.
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Consider the market for credit. When the demand for credit decreases while the supply of credit remains unchanged,
A) the interest rate will decrease and the amount of credit provided in the market will increase. B) the interest rate will increase and the amount of credit provided in the market will increase. C) the interest rate will decrease and the amount of credit provided in the market will decrease. D) the interest rate will increase and the amount of credit provided in the market will decrease.
In what sense do self-fulfilling expectations determine the acceptability of a medium of exchange?
A) People like to do what the government expects them to do. B) People value something as money only if they believe others will accept it from them as payment. C) People expect that money will never lose its value. D) People expect that eventually every country will use the same medium of exchange.
If a price ceiling is not binding, then it will have no effect on the market
a. True b. False Indicate whether the statement is true or false
In the article "Walmart Shutters Quebec Store as Union Closes In," the company argued all of the following except
A. It is not profitable to hire 30 additional workers at an already unprofitable store. B. Unions demanded higher labor costs that would make the store unprofitable. C. Unions impose inefficient work rules. D. The store would be the only unionized Walmart store.