The marginal tax rate is:
A. the difference between the total tax rate and the average tax rate.
B. the percentage of total income paid as taxes.
C. change in taxes/change in taxable income.
D. total taxes/total taxable income.
Answer: C
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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
If all consumers are uninformed about the quality of a product
A) firms can increase product by selling the same product under a different name at a different price. B) firms will not be able to price discriminate. C) firms will price discriminate. D) firms will increase profits by charging different prices for the same product.
Economic profit is always positive when
A. accounting profit is positive. B. accounting profit is zero. C. accounting profit is greater than the firm’s opportunity costs. D. accounting profit is less than the firm’s opportunity costs.
Cyclical unemployment is caused by:
a. shifts in the structure of the economy. b. seasonal layoffs. c. declines in actual output below its full-employment level. d. the absence of job skills among the unemployed.