Refer to the figure above. If the monopolist faces a constant marginal cost of $6, at what price should it sell its output to maximize profits?
A) $2
B) $6
C) $10
D) $12
D
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When tax revenue exceed the government's outlays, the budget
A) has a deficit and the national debt is increasing. B) is balanced and the national debt is decreasing. C) has a surplus and the national debt is decreasing. D) has a surplus and the national debt is increasing. E) None of the above because by law tax revenue cannot exceed the government's expenditures.
The sellers pay the entire sales tax levied on a good when demand is perfectly ________ or supply is perfectly ________
A) elastic; inelastic B) elastic; elastic C) inelastic; inelastic D) inelastic; elastic
The level of real GDP in the long run is
A) potential GDP. B) determined solely by aggregate demand. C) affected by changes in the price level. D) the same as the level of nominal GDP in the long run.
Refer to Figure 4-15. As a result of the tax, is there a loss in consumer surplus?
A) No, because the producer pays the tax. B) No, because the market reaches a new equilibrium C) No, because consumers are charged a lower price to cover their tax burden. D) Yes, because consumers pay a price above the economically efficient price.