Product differentiation makes the demand for a monopolistically competitive firm's product:
A. perfectly elastic.
B. more elastic than for a monopoly.
C. more inelastic than for a monopoly.
D. perfectly inelastic.
Answer: B
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When comparing a permit trading system to the use of a pollution charge
a. a permit trading system requires more government intervention because the government must determine the permit price b. a permit trading system is inflexible because the number of permits cannot be adjusted c. a pollution charge generates revenue for the government on all units of pollution not abated d. pollution charges might create pollution hot spots
Which of the following is not a usual consequence of inflation?
A) Income is redistributed among people. B) People are misled into supposing that their earnings have risen substantially. C) People believe that rising prices have made them worse off. D) The cost of living goes up for everyone. E) The value of money falls.
Suppose there is a market that has market demand characterized as X = 30 - P/3. Suppose further that market supply can be written as X = P/2 - 2.
(A) Find the equilibrium price and quantity in this market. (B) If a unit tax of $16 is imposed on good X, what are the equilibrium price, quantity, and tax revenue in the market? (C) Suppose an ad valorem tax of 30 percent is imposed on good X. The after-tax demand equation would be X = 30 - P/2. Now find the equilibrium price, quantity, and tax revenue in the market. (D) What can be said about the amount of tax revenue generated under each taxing scheme, and why?
The fact that the president must ask Congress for the authority to cut taxes is an example of
A. A rational expectations problem. B. An implementation problem. C. A measurement problem. D. A goal conflict.