Wages paid to teachers, police personnel, and postal workers are not transfer payments because they are payments for services and not simply "transfers" of money
Indicate whether the statement is true or false
TRUE
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Use the figure above to answer this question. Mary is the only veterinarian in a small town and rents a space for her practice. If Mary's landlord decided to charge ________ per hour in rent, Mary would ________
A) $20 more; earn $0 economic profit B) $20 more; still earn an economic profit because she is a monopolist C) $30 more; earn $0 economic profit D) $10 less; raise her prices and earn a higher profit E) $30 more; operate on the inelastic portion of her demand curve
If new firms enter a monopolistically competitive market structure in the long run, ________
A) the demand curves faced by the existing firms shift to the right B) the demand curves faced by the existing firms become perfectly inelastic C) the demand curves faced by the existing firms become more elastic D) the supply curves of the existing firms become relatively more elastic
If corn and soybean are alternative crops grown by most farmers, an increase in the price of corn, other things constant, is likely to:
a. increase the supply of corn. b. ?increase the supply of soybeans. ? c. decrease the supply of soybeans. ? d. decrease the supply of corn. ? e. decrease the demand for soybeans.
Why do perfectly competitive firms maximize their profits by producing so that the price is equal to marginal cost, but monopolists maximize their profits by setting a price that is greater than marginal cost?
What will be an ideal response?