Which statement is correct? The long-run supply curve for a purely competitive:
A. increasing-cost industry is perfectly elastic.
B. increasing-cost industry is upsloping.
C. decreasing-cost industry is upsloping.
D. increasing-cost industry is less elastic than the industry's short-run supply curve.
Answer: B
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Kim is paid $50,000 per year, and pays an annual income tax of 10 percent. Due to an inflation rate of 10 percent, her pay increases to $55,000, which puts her in a higher tax bracket where she must pay 20 percent. Kim has experienced:
A. bracket costs. B. the deflationary cost of tax distortion. C. an increase in her purchasing power. D. the inflationary cost of tax distortion.
Recall the Application about the behavior of prices in retail catalogs to answer the following question(s). According to this Application, the prices which were tracked in the retail catalogs exemplified the macroeconomic concept of the short run, a period of time in which:
A. price changes are significant because the aggregate supply curve is vertical. B. prices never change because the aggregate demand curve is vertical. C. prices change frequently because of changes in aggregate supply. D. prices don't change very much, implying that the aggregate supply curve is relatively flat.
Regarding income distribution and the distribution of wealth
A) wealth is a stock concept and income a flow concept. B) a stock is evaluated at a given moment in time; a flow is evaluated during a period of time. C) income, a flow, can be viewed as a return on wealth. D) All of the above are correct.
In the United States, each bank panic in the late nineteenth and early twentieth centuries was accompanied by
A) inflation. B) a recession. C) deflation. D) a depression.