In monopolistic competition, profit is maximized by producing so that marginal revenue
A) equals price.
B) is negative.
C) equals marginal cost and which are less than price.
D) equals average total cost but not marginal cost.
E) equals marginal cost and equals price.
C
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The government proposes a tax on flowers in order to boost its revenue. If the elasticity of demand is 1.3 and the elasticity of supply is 0.7: a. Consumers will bear the majority of the burden of the tax
b. Producers will bear the majority of the burden of the tax. c. Consumers and producers will bear equal shares of the burden of the tax. d. It does not tell us enough to reveal whether consumers or producers will bear most of the burden of the tax.
Which of the following could lead to a rightward shift of the demand curve for a good?
a. a decrease in the price of a substitute good b. an increase in the price of a complementary good c. a decrease in the price of the good, assuming it is a normal good d. an increase in the price of the good, assuming it is an inferior good e. expectations that the price of the good will rise in the future
Which of the following is a pure public good?
a. cable TV service b. fire protection c. a fireworks display d. corn flakes e. higher education
Given the following Taylor rule:Target federal funds rate = natural rate of interest + current inflation + 2x(inflation gap) + x(output gap);What do the coefficients on the inflation and output gaps (2x, x) reveal?
What will be an ideal response?