The tobacco industry has a Lerner index of 0.76. Based on this information, compute the optimal markup factor.
A. 0.24 times price
B. 4.17 times price
C. 4.17 times marginal cost
D. There is not sufficient information to determine the optimal markup factor.
Answer: C
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Social Security taxes were and are progressive, meaning that the highest proportion is taxed from the highest incomes
Indicate whether the statement is true or false
The money demand curve shifts to the right whenever there is a decrease in the interest rate
a. True b. False Indicate whether the statement is true or false
The ________________ program has often been popular with both economists and the general public because of the way it effectively increases the payment received for work. On average, benefits from this program come to less than $2,300 per family with children.
a. Temporary Assistance for Needy Families (TANF) b. Supplemental Nutrition Assistance Program (SNAP) c. Aid to Families with Dependent Children (AFDC) d. Earned Income Tax Credit (EITC)
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real GDP and current international transactions in the context of the Three-Sector-Model?
a. Real GDP falls, and current international transactions become more negative (or less positive). b. Real GDP rises, and current international transactions become more negative (or less positive). c. Real GDP and current international transactions remain the same. d. Real GDP rises, and current international transactions remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.