A deadweight loss occurs as a result of a per-unit tax because:
a. the government spends tax dollars less efficiently than do private citizens
b. there is a decline in output for units for which the marginal benefit exceeds the marginal cost.
c. taxes cause an overproduction of output relative to the socially efficient level or production.
d. a surplus is created.
b
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Recurring fixed costs may lead to only one firm producing in a Cournot oligopoly model.
Answer the following statement true (T) or false (F)
Comment on the following statement. "Monopolistically competitive firms will still produce in the short run even if the demand curve is below their average variable cost curve because the firms still maintain a degree of market power."
What will be an ideal response?
Which of the following is a macroeconomic factor that contributed to the financial crisis in 2007?
A) Global saving and investment imbalances B) Financial market innovation C) Deeper levels of integration across financial markets D) Challenges and failures in financial regulation