Suppose a monopolist's costs and revenues are as follows: ATC = $50; MC = $45; MR = $35; P = $55. The firm should
A) increase output and decrease price.
B) decrease output and increase price.
C) not change output or price.
D) shut down.
Answer: B
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Assume that the above figure represents the domestic supply and demand for coffee.The domestic price with no trade is represented by $5.50 . The price with free trade is represented by $4.00
Assume that the government places a $1 per pound tariff on imported coffee, which decreases the domestic quantity demanded of coffee by 100 million pounds and increases domestic production by 100 million pounds. Draw the rectangle that would represent the amount of tax revenue that the government would realize from this tax and calculate the dollar figure.
The Lost Decade began in 1990 when Colombia announced that it lacked the international reserves it needed to pay the interest and principle due on its foreign debt
Indicate whether the statement is true or false
During the 1987-88 expansion period interest rates in the United States rose as did the rate of investment in the economy. These facts suggest
A) the simple accelerator effect and the effects of higher interest rates complemented each other to raise output growth. B) the simple accelerator effect and the effects of lower interest rates complemented each other to lower output growth. C) the effects of the accelerator were greater than those of increased interest rates. D) the effects of the accelerator were smaller than those of increased interest rates.
What are the advantages of a flat tax system?