The short-run aggregate supply curve is horizontal when
A) prices are inflexible and the economy is at full employment.
B) there are unemployed resources and prices do not increase when aggregate demand increases.
C) there are unemployed resources and prices do not decrease when aggregate supply increases.
D) there are no unemployed resources and prices do not increase when aggregate demand or supply increases.
B
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A friend tells you he is studying the incidence of the corporate income tax. What is the subject of his study?
A) how frequently corporations should be taxed B) how inflation affects the amount of tax revenue collected from firms C) how corporations can aid the government in collecting delinquent taxes D) how the burden of corporate taxation is distributed among stockholders, employees, and consumers
Collective bargaining is a process used by unions and management to settle upon the terms of a labor contract
a. True b. False Indicate whether the statement is true or false
If the market price ever drops below a firm's average variable costs at its profit-maximizing level of output the:
A. loss-minimizing quantity of output is zero. B. firm is not earning enough revenue to cover the variable costs of production. C. firm should shut down immediately. D. All of these are true.
Costume jewelry is produced in a monopolistically competitive market. One producer finds that MR = MC = $3 when output is 700 necklaces. An economist studying this information can conclude that:
A. the producer is charging a price of $3. B. economic profit is $2,100. C. the producer charges a price greater than $3. D. new firms will want to enter.