A firm’s total revenue is simply the price of its product multiplied by the quantity sold.
Answer the following statement true (T) or false (F)
True
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If lower-income households spend a greater share of their income on cigarettes than do higher-income households, then a tax that raises the price of cigarettes will
A) cause lower-income households to incur a greater loss of consumer surplus than that incurred by higher-income households. B) cause higher-income households to incur a greater loss of consumer surplus than that incurred by lower-income households. C) raise consumer surplus among higher-income households. D) cause consumer surplus to decline among smokers, but the relative impact cannot be determined from the given information.
The Fed is institutionally independent. A major disadvantage of this is that monetary policy
a. will always be coordinated with fiscal policy. b. is not subject to democratic control as other policies are. c. will never offset fiscal policy. d. cannot be changed once it has been instituted.
What is oligopoly? How does oligopoly differ from the other kinds of market structure?
What will be an ideal response?
If economic profits exist (i.e., above $0, or "above-normal") in a competitive market new firms will enter to drive down price.
a. true b. false