A tax on cigarettes:
A. increases total surplus.
B. increases efficiency in the market.
C. will increase both total surplus and efficiency in the market.
D. like any tax, will always reduce surplus and efficiency in markets.
C. will increase both total surplus and efficiency in the market.
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What does "there is no such thing as a free lunch" mean in economics?
A. Sometimes people may take friends out to lunch and pay for them. B. All items in the lunch menu have specific prices. C. Products only have value because people are willing to pay for them. D. Scarce resources are used up to provide "freebies" and giveaways.
If firms are producing at a profit-maximizing level of output where the price exceeds the average total cost:
A. accounting profits must be negative. B. economic profits must be zero. C. other firms will enter the market. D. firms will exit the market.
Input-output analysis is commonly used in production decisions.
Answer the following statement true (T) or false (F)
When firms advertise their products, they are attempting to:
a. shift the supply curve of the product to the right.
b. shift the supply curve of the product to the left.
c. shift the demand for the product to the right.
d. shift the demand for the product to the left.
e. create a surplus of the product.