If the government imposes a $3 tax in a market, the equilibrium price will rise by $3
a. True
b. False
Indicate whether the statement is true or false
False
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Suppose the local government is considering using marginal cost pricing to set rates for a cable TV company. Which of the following arguments supports marginal cost pricing?
a. Marginal cost pricing gives the monopoly economic profit and a reason to stay in business. b. Marginal cost pricing gives the firm a normal economic profit and a reason to stay in business. c. Marginal cost pricing is allocatively efficient. d. Average cost pricing requires subsidies, which can be costly. e. Average cost pricing forces monopolies to operate at a loss.
Which of the following is a valid difference between sole proprietorship and partnership?
a. Partnerships require a written agreement while sole proprietorships do not. b. Partnerships require a state charter while sole proprietorships do not. c. Partnerships generate lower profits than sole proprietorships. d. Partnerships are characterized by unlimited liability, while sole proprietorships are not. e. Partnerships consist of two or more partners sharing the responsibility of the firm, while sole proprietorship consists of a single individual.
If the government announces a cut in the capital gains tax and it is expected that investment spending will increase as a result, which of the following are also likely?
a. An upward shift in the aggregate expenditure line, a rightward shift of the money demand curve, and a leftward shift of the aggregate demand curve b. A downward shift in the aggregate expenditure line, a rightward shift of the money demand curve, and a rightward shift of the aggregate demand curve c. An upward shift in the aggregate expenditure line, a leftward shift of the money demand curve, and a rightward shift of the aggregate demand curve d. A downward shift in the aggregate expenditure line, a leftward shift of the money demand curve, and a leftward shift of the aggregate demand curve e. An upward shift in the aggregate expenditure line, a rightward shift of the money demand curve, and a rightward shift of the aggregate demand curve.
When there is a labor union, the labor supply curve is
a. a horizontal line at the desired wage b. positively sloped c. negatively sloped d. a vertical line at the desired level of employment e. backward bending