The above figure shows the demand and cost curves for a firm in monopolistic competition. The firm maximizes its profit by
A) producing 8 units at a price of $5 each.
B) producing 8 units at a price of $15 each.
C) producing 4 units at a price of $20 each.
D) producing 12 units at a price of $10 each.
B
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The costs affecting decisions to supply goods and services are always
A) average costs. B) costs not yet incurred. C) sunk costs. D) total costs. E) unavoidable costs.
Suppose that on average each dollar in 1988 would buy what could have been purchased for 25 cents in 1967 (which you assume is the base year for the CPI). What is the CPI in 1988?
A. 100 B. 200 C. 400 D. 500
If each taxpayer is obliged to pay the same tax—a fixed sum of money—then the tax is
a. progressive b. proportional c. income based d. poll or head based e. excise based
The sum of public spending on goods and services and transfer payments during a given period cannot exceed tax revenues plus borrowed funds. This is the statement for
A. the government budget constraint. B. ad valorem taxation. C. an excise tax. D. a sales tax.