If the demand curve facing the Acme Awl Company is tangent to its average total cost curve, all of the following statements are true except one. Which is the exception?
a. Economic profit is zero.
b. A normal profit exists.
c. Marginal cost must exceed marginal revenue.
d. Acme has excess capacity.
e. Firms have no incentive to enter or leave this industry.
C
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The government raises the sales tax on shirts. The tax is imposed on sellers. As a result, the ________
A) supply curve of shirts shifts leftward B) supply curve of shirts shifts rightward C) demand curve for shirts becomes vertical D) demand curve for shirts becomes horizontal
The natural rate of interest falls with a __________ shift of the __________ curve
A) rightward; IS B) rightward; LM C) leftward; IS D) leftward; LM
A sales tax is
A) a tax assessed on personal income. B) a tax assessed on the prices paid for numerous goods and services. C) a tax assessed on a public good. D) the total tax base.
In the classical model, if the amount households wish to save exceeds the sum of the amount businesses wish to invest plus the government's budget deficit, the loanable funds market
a. will be in disequilibrium, but this does not prevent equilibrium in the total economy b. will be in disequilibrium, and we would expect the supply of funds to decrease c. will be in disequilibrium, and we would expect the interest rate to rise d. will be in disequilibrium, and we would expect the interest rate to fall e. may be in equilibrium, because unplanned inventory changes have not been included